The mitogenic effect of basic fibroblast growth factor and nerve growth factor (2.5S) on olfactory ensheathing cell culture was examined by bromodeoxyuridine uptake. It was found that, at 10 ng/ml, basic fibroblast growth factor elicited about a three-fold increase in proliferation, while the stimulatory effect of nerve growth factor was considerably less. The increased proliferation resulting from basic fibroblast growth factor could be attributed to perlecan, which was shown to be expressed by ensheathing cell in culture. Perlecan is known to induce high-affinity binding of basic fibroblast growth factor to receptors on cell membranes. Immunohistochemical staining demonstrated that basic fibroblast growth factor was abundantly expressed in select regions of the lamina propria underlying the olfactory epithelium. In these regions, contiguous patches of olfactory epithelium also showed the presence of basic fibroblast growth factor. Although basic fibroblast growth factor was present on the periphery of nerve bundles in the olfactory nerve layer of the bulb, all other laminae did not demonstrate the presence of this factor. The immunohistochemistry and cell culture results show that regions of the lamina propria and small patches of the olfactory epithelium, by their presence of basic fibroblast growth factor, are potential sites of ensheathing cell proliferation in vivo.