Despite the ubiquitous presence of basic fibroblast growth factor (bFGF) in normal tissues, endothelial cell proliferation in these tissues is usually very low, suggesting that bFGF is somehow sequestered from its site of action. Immunohistochemical staining revealed the localization of bFGF in basement membranes of diverse tissues, suggesting that the extracellular matrix (ECM) may serve as a reservoir for bFGF. Moreover, functional studies indicated that bFGF is an ECM component required for supporting endothelial cell proliferation and neuronal differentiation. We have found that bFGF is bound to heparan sulfate (HS) in the ECM and is released in an active form when the ECM-HS is degraded by heparanase expressed by normal and malignant cells (i.e. platelets, neutrophils, lymphoma cells). It is proposed that restriction of bFGF bioavailability by binding to ECM and local regulation of its release provide a novel mechanism for neovascularization in normal and pathological situations. The subendothelial ECM contains also tissue type- and urokinase type-plasminogen activators which participate in cell invasion and tissue remodeling. These results and studies on the properties of other ECM-immobilized enzymes (i.e. thrombin, plasmin, lipoprotein lipase) and growth factors (GM-CSF, IL-3, osteogenin), suggest that the ECM provides a storage depot for biologically active molecules which are thereby stabilized and protected. This may allow a more localized and persistent mode of action, as compared to the same molecules in a fluid phase.