The effects of basic fibroblast growth factor (bFGF) on differentiation of human fetal microglial cells were investigated. Human ramified microglial cells treated with human recombinant bFGF underwent a morphological change which resulted in a round-shape phenotype. bFGF was also able to induce a dose- and time-dependent increase in cell proliferation and enhanced phagocytic and non-specific esterase activity. These results indicate that ramified microglia, when properly stimulated, are regulated in their physiological and proliferative activities and are transformed into amoeboid forms. Growth factors, such as bFGF, are likely to play a key role in microglial transformation in both normal developing brain and in central nervous system injury.