FGF16 has been reported to be preferentially expressed in the adult rat heart. We have investigated the expression of FGF16 in the perinatal and postnatal heart and its functional significance in neonatal rat cardiac myocytes. FGF16 mRNA accumulation was observed by quantitative RT-PCR between neonatal days 1 and 7, with this increased expression persisting into adulthood. FGF2 has been shown to increase neonatal rat cardiac myocyte proliferative potential via protein kinase C (PKC) activation. Gene array analysis revealed that FGF16 inhibited the upregulation by FGF2 of cell cycle promoting genes including cyclin F and Ki67. Furthermore, the CDK4/6 inhibitor gene Arf/INK4A was upregulated with the combination of FGF16 and FGF2, but not with either factor on its own. The effect on Ki67 was validated by protein immunodetection, which also showed that FGF16 significantly decreased FGF2-induced Ki67 labeling of cardiac myocytes, although it alone had no effect on Ki67 labeling. Inhibition of p38 MAPK potentiated cardiac myocyte proliferation induced by FGF2, but did not alter the inhibitory action of FGF16. Receptor binding assay showed that FGF16 can compete with FGF-2 for binding sites including FGF receptor 1. FGF16 had no effect on activated p38, ERK1/2 or JNK/SAPK after FGF2 treatment. However, FGF16 inhibited PKC alpha and epsilon activation induced by FGF2 and, importantly, IGF1. Collectively, these data suggest that expression and release of FGF16 in the neonatal myocardium interferes with cardiac myocyte proliferative potential by altering the local signaling environment, via modulation of PKC activation and cell cycle-related gene expression.