Basic fibroblast growth factor (bFGF) was studied for its effects on bone formation in cultured rat calvariae. bFGF at 0.1-100 ng/ml stimulated [3H]thymidine incorporation into DNA by up to 4.4-fold. bFGF also increased the number of colcemid-induced metaphase arrested cells and the DNA content. Transient (24 h) treatment with bFGF enhanced [3H]-proline incorporation into collagen 24-48 h after the factor was removed; this effect was DNA synthesis dependent and blocked by hydroxyurea. The collagen stimulated by bFGF was type I, and this effect was observed primarily in the periosteum-free bone. In contrast, continuous treatment with bFGF for 24-96 h inhibited [3H]proline incorporation into type I collagen. bFGF did not alter collagen degradation. In conclusion, bFGF stimulates calvarial DNA synthesis, which causes an increased number of collagen-synthesizing cells, but bFGF has a direct inhibitory effect on collagen synthesis.