Fibroblast growth factors (FGFs) require heparan sulfate proteoglycans (HSPGs) as cofactors for signaling. The heparan sulfate chains (HS) mediate stable high affinity binding of FGFs to their receptor tyrosine kinases (FR) and may specifically regulate FGF activity. A novel in situ binding assay was developed to examine the ability of HSPGs to promote FGF/FR binding using a soluble FR fusion construct (FR1‐AP). This fusion protein probe forms a dimer in solution, simulating the dimerization or oligomerization that is thought to occur at the cell surface physiologically. In frozen sections of human skin, FGF‐2 binds to keratinocytes and basement membranes of epidermis and dermal blood vessels. In contrast, in skin preincubated with FGF‐2, FR1‐AP binds avidly to FGF‐2 immobilized on keratinocyte cell surfaces, but fails to bind to basement membranes at the dermo‐epidermal junction or dermal microvessels despite the fact that these structures bind large amounts of FGF‐2. Apparently, basement membrane and cell surface HSPGs differ in their ability to mediate the assembly of a FGF/FR signaling complex presumably due to structural differences of the heparan sulfate chains.—Chang, Z., Meyer, K., Rapraeger, A. C., Friedl, A. Differential ability of heparan sulfate proteoglycans to assemble the fibroblast growth factor receptor complex in situ. FASEB J. 14, 137–144(2000)