The effects of cell surface heparan sulfate proteoglycan (HSPG) prepared from log and confluent monolayers of a rat hepatoma cell line on hepatoma cell growth were studied. When HSPG isolated from confluent cells was added exogenously to log phase cells, it was internalized and free heparan sulfate (HS) chains appeared transiently in the nucleus. Concurrently, the growth of the treated cells was inhibited, but the cells resumed logarithmic growth as the level of nuclear HS fell, and the cells grew to confluence and became contact inhibited. When HSPG prepared from log-phase hepatoma cells was added exogenously to log phase cells, it was internalized but very little of the internalized HS appeared in the nucleus, and there was no change in the rate of cell growth. However, when the rate of cell growth was reduced by culture of the cells in serum-and insulindeficient medium, HSPG prepared from log-phase cells stimulated the growth rate of these slow-growing cells. The cell cycle dependency of HSPG uptake and growth inhibition was studied in cultures synchronized by a thymidine/aphidi-Colin double block. When [35S04]HSPG from confluent cells was added to synchronized cells just as they were released from the second block, a portion of the [35S04]HSPG was internalized and [35S04]HS appeared in the nucleus. However, at mitosis the [35S041HS disappeared almost completely from all of the cellular pools, and after mitosis, more of the [35S04]HSPG was taken up and [35S04]HS reappeared in the nucleus and remained in the nucleus until the cells divided again. When cultures were released from the aphidicolin block, both control and HSPG-treated cells progressed through the S, the GL, and the M phases of the cell cycle. However, the length of the G I phase of the cycle was increased in the HSPG-treated cells. The treated cultures then progressed through the second S, G I , and M phases. Thus, the inhibition of cell division occurred in the GI phase of the cell cycle, prior to the CI/S boundary. Addition of the HSPC to the synchronized cultures just after the first mitosis resulted in an immediate arrest of the cell cycle in G I . These results support the earlier suggestion (M.