Rapidly growing human teratocarcinoma cells (Tera-2) can be induced to differentiate into quiescent, nontumorigenic cells expressing neuronal markers. To more closely mimic the in vivo conditions for tumor growth, we grew Tera-2 cells in three-dimensional collagen gel cultures. The undifferentiated cells proliferated in the gel, forming tight colonies. Addition of soluble fibroblast growth factor 1 or 2 (FGF1 or FGF2) into the gel resulted in scattering of single cells throughout the collagen gel. In a FGF gradient the cells moved rapidly toward a higher concentration. On the contrary, cells first differentiated for 8 days in retinoic acid died within a few days after transfer into the collagen gel. Alternatively, if retinoic acid was included in the collagen gel, the proliferating undifferentiated cells died after 4-5 days in the gel. This differentiation-related cell death was completely opposed by including FGF in the collagen gel. When placed in the FGF gradient, the fully differentiated cells survived at the areas of higher FGF concentration, but no more migrated. The survival of retinoic acid-differentiated Tera-2 cells in collagen was also mediated by direct contact with glioma cells or the heparan sulfate-rich portion of glioma or endothelial cell matrix. These effects on differentiated cells were sensitive to inhibition by affinity-purified anti-FGF2 IgG. Thus, FGF has the potential to act as a migration-inducing factor either in solution or, more likely, in vivo, as an immobilized, matrix-bound growth factor directing the movement of responsive cells. The development of differentiation-associated FGF dependency allows survival of the cells only at places where they are in close contact with either FGF-synthesizing cells or FGF-rich extracellular structures such as basement membranes. © 1994 by Academic Press, Inc.