Proliferation of smooth muscle cells from the pulmonary arteries and aortas of fetal calves is inhibited by heparin in vitro. This effect is reversible and dose dependent. Comparisons with effects of other polysaccharides indicate that only extensively sulfated polysaccharides inhibit proliferation of smooth muscle cells but that specific structural features of heparin are required to achieve maximum effect. Heparin-Sepharose chromatography of medium containing fetal calf serum reduces the ability of that medium to promote growth of smooth muscle cells from fetal pulmonary arteries, suggesting that heparin may remove soluble growth factors in serum. However, inhibition of fetal pulmonary artery smooth muscle cell proliferation by heparin is identical in media supplemented either with serum prepared from fetal calf plasma, in which platelet-derived growth factor (PDGF) i s not detectable, or with fetal calf serum, which contains relatively abundant PDGF (114 pg/ml). Thus, inhibition of fetal pulmonary artery smooth muscle cell proliferation by heparin is not mediated solely by decreased availability or activity of exogenous PDGF. These studies suggest that morphogenesis of the smooth muscle investment of the pulmonary arteries could be regulated by local production of heparinlike inhibitors of smooth muscle cell growth.