Basic fibroblast growth factor (FGF) is a potent endothelial cell mitogen that has been proposed to play a role in proliferative diabetic retinopathy and other neovascular processes. Our understanding of the in vivo role of basic FGF in the pathogenesis of these disorders is limited. We studied the immunolocalization of basic FGF in 16 clinical cases of diabetic retinopathy to determine whether the normal retinal distribution of basic FGF changed during the development of diabetic retinopathy and correlated with the onset of retinal neovascularization. By using monoclonal and affinity-purified polyclonal antibodies against basic FGF and heparan sulfate proteoglycan (HSPG), we found that basic FGF colocalized with HSPG to vascular basement membranes. As the basement membranes thickened during the progression of diabetic retinopathy, the intraretinal stores of immunoreactive basic FGF and HSPG expanded. With the development of neovascularization, the colocalization of basic FGF and HSPG changed; HSPG localized to basement membranes, while basic FGF localized intracellularly, with only minimal basement membrane immunoreactivity. Incubations of the neovascular fronds with exogenous basic FGF demonstrated multiple HSPG glycosaminoglycan-binding sites for basic FGF, indicating that basic FGF had not been released from the matrix of neovascular fronds by heparitanase digestion.