The ephrins are a family of proteins known to bind the Eph (erythropoietin-producing hepatocellular) receptor tyrosine kinase family. In the present paper, we provide data showing that ephrin-B3 binds a sulfated cell-surface protein on HEK-293T (human embryonic kidney-293 cells expressing the large T-antigen of simian virus 40) and HeLa cells, a binding that is nearly completely blocked by treatment of these cell lines with chlorate or heparinase, or by addition of the heavily sulfated glycosaminoglycan heparin. This indicates that heparan sulfate on these cells is essential for cell-surface binding of ephrin-B3. Heparin did not affect ephrin-B3 binding to EphB receptors expressed on transfected HEK-293T cells, indicating further that ephrin-B3 binds an alternative receptor which is a heparan sulfate proteoglycan. Site-directed mutagenesis analysis revealed that Arg178 and Lys179 are important for heparin binding of ephrin-B3 and also for ephrin-B3 binding to cells. These amino acids, when introduced in the non-heparin-binding ephrin-B1, conferred the heparin-binding property. Functional studies reveal that ephrin-B3 binding to cells induces cellular signalling and influences cell rounding and cell spreading. In conclusion, our data provide evidence for an unknown ephrin-B3-binding cell-surface proteoglycan involved in cellular signalling.