Secreted and nuclear forms of fibroblast growth factor 3 (FGF3) have opposing effects on cells. The secreted form stimulates cell growth and transformation, while the nuclear form inhibits DNA synthesis and cell proliferation. By using the yeast two-hybrid system we have identified a nucleolar FGF3 binding protein (NoBP) which coimmunoprecipitated and colocalized with FGF3 in transfected COS-1 cells. Characterization of the NoBP binding domain of FGF3 exactly matched the sequence requirements of FGF3 for its translocation into the nucleoli, suggesting that NoBP might be the nucleolar binding partner of FGF3 essential for its nucleolus localization. Carboxyl-terminal domains of NoBP contain linear nuclear and nucleolar targeting motifs which are capable of directing a heterologous protein -galactosidase to the nucleus and the nucleoli. While NoBP expression was detected in all analyzed proliferating established cell lines, NoBP transcription was rapidly downregulated in the promyelocytic leukemia cell line HL60 when induced to differentiate. Analysis on the expression pattern of NoBP mRNA throughout the cell cycle in HeLa cells synchronized by lovastatin demonstrated a substantial upregulation during the late G₁/early S phase. NoBP overexpression conferred a proliferating effect onto NIH 3T3 cells and can counteract the inhibitory effect of nuclear FGF3, suggesting a role of NoBP in controlling proliferation in cells. We propose that NoBP is the functional target of nuclear FGF3 action.