Angiogenesis, the formation of new capillaries, which is observed in embryonic and injured tissue and is particularly prominent in the vicinity of solid tumours, involves the migration and proliferation of capillary endothelial cells. It is probably triggered by agents, such as basic fibroblast growth factor (bFGF), thought to be released from tissues adjacent to proliferating capillaries. As well as being a potent inducer of cell division in capillary endothelial cells in vitro, bFGF can act as an angiogenic agent in vivo. It is present in a wide variety of richly vascularized tissues including brain, pituitary, retina, adrenal gland, kidney, corpus luteum, placenta and various tumours. So far, however, the normal bFGF-producing cell species in these tissues have not been identified. We report here that capillary endothelial cells express the bFGF gene, that they produce and release bFGF and that bFGF derived from them can stimulate the proliferation of capillary endothelial cells. We conclude that bFGF can act as a self-stimulating growth factor for capillary endothelial cells, and that it is possible that the formation of new capillaries is induced by capillary endothelial cells themselves.