We have cloned a genomic region of the murine fibroblast growth factor (FGF) receptor 1 (FGFR1) gene that includes three alternative exons for the third immunoglobulinlike domain in the extracellular region of the receptor. The mRNA of one of these splice variants encodes a secreted receptor that lacks transmembrane and cytoplasmic sequences as well as a portion of the third immunoglobulinlike domain. Highest levels of mRNA encoding this variant were found in brain, skeletal muscle, and skin. We expressed this form of FGFR1 in CHO cells and showed that the recombinant secreted protein binds acidic FGF. We also discovered a novel alternative exon in the third immunoglobulinlike domain that encodes part of a transmembrane FGFR1 mRNA. This exon is highly homologous to the corresponding region of the keratinocyte growth factor receptor. Transcripts including this exon were present at highest levels in the skin. We cloned an FGFR1 cDNA which includes this exon and expressed this receptor variant in L6 rat skeletal muscle myoblasts. The new receptor variant had a 50-fold-lower affinity for basic FGF than does the published FGFR1 variant, whereas both forms of receptor bound acidic FGF with high affinity. These results show that the third immunoglobulinlike domain plays an important role in determining the binding specificities for different FGFs. Our data provide the first evidence that differential splicing in the extracellular region of a receptor gene generates receptor variants with different ligand-binding specificities.