Synovial fluid cells from joints of rheumatoid arthritis (RA) patients express a novel variant of CD44 (designated CD44vRA), encoding an extra trinucleotide (CAG) transcribed from intronic sequences flanking a variant exon. The CD44vRA mutant was detected in 23 out of 30 RA patients. CD44-negative Namalwa cells transfected with CD44vRA cDNA or with CD44v3-v10 (CD44vRA wild type) cDNA bound FGF-2 to an equal extent via their associated heparan sulfate chains. However, Namalwa cells, immobilizing FGF-2 via their cell surface CD44vRA, bound substantially more soluble FGF receptor-1 (FGFR-1) than did Namalwa cells immobilizing the same amount of FGF-2 via their cell surface CD44v3-v10. The former cells stimulated the proliferation of BaF-32 cells, bearing FGFR-1, more efficiently than did the latter cells. Finally, isolated primary synovial fluid cells from RA patients expressing CD44vRA bound more soluble FGFR-1 to their cell surface-associated FGF-2 than did corresponding synovial cells expressing CD44v3-v10 or synovial cells from osteoarthritis patients. The binding of soluble FGFR-1 to RA synovial cells could be specifically reduced by their preincubation with Ab's against the v3 exon product of CD44. Hence, FGF-2 attached to the heparan sulfate moiety expressed by the novel CD44 variant of RA synovium cells exhibits an augmented ability to stimulate FGFR-1-mediated activities. A similar mechanism may foster the destructive inflammatory cascade not only in RA, but also in other autoimmune diseases.