Splice variations in genes coding for the transmembrane FGF receptor (FGFR) result in isoforms that vary in the ectodomain, intracellular juxtamembrane domain, and the intracellular kinase domain. An analysis of biochemical functions of distinct recombinant isoforms expressed in baculoviral-infected insect cells allowed generation of models for function of splice variants in both the ecto- and intracellular domains. A structural model for the ectodomain of the FGFR is proposed as follows. Alternately-spliced immunoglobulin-like disulfide Loop I, which is not required for ligand-binding, is sufficiently interactive with the base FGF binding site formed by Loops II and III to modify ligand affinity and affect interaction of the receptor with heparan sulfate cofactor. The NH2-terminal domain of Loop II, which is highly conserved across all isoforms, exhibits a 19-residue heparin-binding domain which is obligatory for FGF binding. Heparin protects a 30-kDa ligand-binding fragment from proteolysis that is composed of Loop II, the inter-Loop II/III sequence, and the NH2-terminus of Loop III. This suggests that the high-affinity FGF receptor complex is an intimate ternary complex of transmembrane tyrosine kinase, heparan sulfate glycosaminoglycan, and FGF, each of which have interactive binding domains for the other and may contribute to specificity of the FGFR complex. Although Ig Loop II, the inter-Loop II/III sequence, and the NH2-terminus of Loop III with heparan sulfate form the base FGF binding site, mutually exclusive alternate splicing of two exons coding for the COOH-terminal half of Loop III determines which specific members of the FGF ligand family bind with high affinity to the base site. A kinase- and tyrosine phosphorylation site-defective splice variant, FGFR type 2, acts as a dominant-negative suppressor of phosphorylation of specifically tyr-653 in the catalytic domain of the kinase, with less effect on phosphorylation of tyr-766 in the COOH-terminal tail. We propose that phosphorylation of tyr-766, which is required for interaction of phospholipase C gamma 1 (PLC gamma 1) with the receptor, may occur by a cis-intramolecular mechanism within FGFR monomers, while phosphorylation of tyr-653, which is required for phosphorylation of PLC gamma 1, may occur by a trans-intermolecular mechanism between monomers within kinase homodimers. From the combined results, we propose a model whereby increasing concentrations of FGF may control FGF-mediated signal transduction by heterodimerization of different FGFR monomers. Different monomers arise by regulated combinatorial alternate splicing that alters both the extracellular and intracellular domains.