A novel proteolytic event controls Hedgehog intracellular sorting and distribution to receptive fields.

The patterning activity of a morphogen depends on secretion and dispersal mechanisms that shape its distribution to the cells of a receptive field. In the case of the protein Hedgehog (Hh), these mechanisms of secretion and transmission remain unclear. In the developing Drosophila visual system, Hh is partitioned for release at opposite poles of photoreceptor neurons. Release into the retina regulates the progression of eye development; axon transport and release at axon termini trigger the development of postsynaptic neurons in the brain. Here we show that this binary targeting decision is controlled by a C-terminal proteolysis. Hh with an intact C-terminus undergoes axonal transport, whereas a C-terminal proteolysis enables Hh to remain in the retina, creating a balance between eye and brain development. Thus, we define a novel mechanism for the apical/basal targeting of this developmentally important protein and posit that similar post-translational regulation could underlie the polarity of related ligands.

SMOC can act as both an antagonist and an expander of BMP signaling.

The matricellular protein SMOC (Secreted Modular Calcium binding protein) is conserved phylogenetically from vertebrates to arthropods. We showed previously that SMOC inhibits bone morphogenetic protein (BMP) signaling downstream of its receptor via activation of mitogen-activated protein kinase (MAPK) signaling. In contrast, the most prominent effect of the Drosophila orthologue, pentagone (pent), is expanding the range of BMP signaling during wing patterning. Using SMOC deletion constructs we found that SMOC-∆EC, lacking the extracellular calcium binding (EC) domain, inhibited BMP2 signaling, whereas SMOC-EC (EC domain only) enhanced BMP2 signaling. The SMOC-EC domain bound HSPGs with a similar affinity to BMP2 and could expand the range of BMP signaling in an in vitro assay by competition for HSPG-binding. Together with data from studies in vivo we propose a model to explain how these two activities contribute to the function of Pent in Drosophila wing development and SMOC in mammalian joint formation.

The full-length unprocessed hedgehog protein is an active signaling molecule.

The hedgehog (HH) family of ligands plays an important instructional role in metazoan development. HH proteins are initially produced as approximately 45-kDa full-length proteins, which undergo an intramolecular cleavage to generate an amino-terminal product that subsequently becomes cholesterol-modified (HH-Np). It is well accepted that this cholesterol-modified amino-terminal cleavage product is responsible for all HH-dependent signaling events. Contrary to this model we show here that full-length forms of HH proteins are able to traffic to the plasma membrane and participate directly in cell-cell signaling, both in vitro and in vivo. We were also able to rescue a Drosophila eye-specific hh loss of function phenotype by expressing a full-length form of hh that cannot be processed into HH-Np. These results suggest that in some physiological contexts full-length HH proteins may participate directly in HH signaling and that this novel activity of full-length HH may be evolutionarily conserved.

A C-terminal motif targets Hedgehog to axons, coordinating assembly of the Drosophila eye and brain.

The developmental signal Hedgehog is distributed to two receptive fields by the photoreceptor neurons of the developing Drosophila retina. Delivery to the retina propagates ommatidial development across a precursor field. Transport along photoreceptor axons induces the development of postsynaptic neurons in the brain. Hedgehog is composed of N-terminal and C-terminal domains that dissociate in an autoproteolytic reaction that attaches cholesterol to the N-terminal cleavage product. Here, we show that the N-terminal domain is targeted to the retina when synthesized in the absence of the C-terminal domain. In contrast to studies that have focused on cholesterol as a determinant of subcellular localization, we find that the C-terminal domain harbors a conserved motif that overrides retinal localization, sending most of the autocleavage products into vesicles bound for growth cones or synapses. Competition between targeting signals at the opposite ends of Hedgehog apparently controls the match between eye and brain development.