The TGF-beta/activin/BMP superfamily of growth factors signals through heteromeric receptor complexes of type I and type II serine/threonine kinase receptors. The signal originated by TGF-beta-like molecules appears to be transduced by a set of evolutionarily conserved proteins known as SMADs, which upon activation directly translocate to the nucleus where they may activate transcription. Five SMAD proteins have so far been characterized in vertebrates. These factors are related to the mediator of decapentaplegic (dpp) signalling, mothers against dpp (Mad), in Drosophila and to the Sma genes from Caenorhabditis elegans. Smad1 and Smad2 have been shown to mimic the effects of BMP and activin, respectively, both in Xenopus and in mammalian cells, whereas Smad3 (a close homologue of Smad2) and the related protein DPC4, a tumour-suppressor gene product, mediate TGF-beta actions. We report here that DPC4 is essential for the function of Smad1 and Smad2 in pathways that signal mesoderm induction and patterning in Xenopus embryos, as well as antimitogenic and transcriptional responses in breast epithelial cells. DPC4 associates with Smad1 in response to BMP and with Smad2 in response to activin or TGF-beta. DPC4 is therefore a regulated partner of SMADs that function in different signalling pathways of the TGF-beta family.

Human embryonic stem cells (hESCs) self-renew indefinitely and give rise to derivatives of all three primary germ layers, yet little is known about the signaling cascades that govern their pluripotent character. Because it plays a prominent role in the early cell fate decisions of embryonic development, we have examined the role of TGFβ superfamily signaling in hESCs. We found that, in undifferentiated cells, the TGFβ/activin/nodal branch is activated (through the signal transducer SMAD2/3) while the BMP/GDF branch(SMAD1/5) is only active in isolated mitotic cells. Upon early differentiation, SMAD2/3 signaling is decreased while SMAD1/5 signaling is activated. We next tested the functional role of TGFβ/activin/nodal signaling in hESCs and found that it is required for the maintenance of markers of the undifferentiated state. We extend these findings to show that SMAD2/3 activation is required downstream of WNT signaling, which we have previously shown to be sufficient to maintain the undifferentiated state of hESCs. Strikingly, we show that in ex vivo mouse blastocyst cultures, SMAD2/3 signaling is also required to maintain the inner cell mass (from which stem cells are derived). These data reveal a crucial role for TGFβ signaling in the earliest stages of cell fate determination and demonstrate an interconnection between TGFβ and WNT signaling in these contexts.

Bone morphogenetic protein (BMP) receptors signal by phosphorylating Smad1, which then associates with Smad4; this complex moves into the nucleus and activates transcription. Here we report the existence of a natural inhibitor of this process, Smad6, a longer version of the previously reported JV15-1. In Xenopus embryos and in mammalian cells, Smad6 specifically blocks signaling by the BMP/Smad1 pathway. Smad6 inhibits BMP/Smad1 signaling without interfering with receptor-mediated phosphorylation of Smad1. Smad6 specifically competes with Smad4 for binding to receptor-activated Smad1, yielding an apparently inactive Smad1-Smad6 complex. Therefore, Smad6 selectively antagonizes BMP-activated Smad1 by acting as a Smad4 decoy.

We have identified the 30-zinc finger protein OAZ as a DNA-binding factor that associates with Smads in response to BMP2, forming a complex that transcriptionally activates the homeobox regulator of Xenopus mesoderm and neural development, Xvent-2. OAZ contains a BMP signaling module formed by two clusters of fingers that bind Smads and the Xvent-2 BMP response element, respectively. Previously implicated as a transcriptional partner of Olf-1/EBF in olfactory epithelium and lymphocyte development in the rat, OAZ fulfills this role through clusters of fingers that are separate from the BMP signaling module. The mutually exclusive use of OAZ by the BMP-Smad and Olf pathways illustrates the dual role of a multi-zinc finger protein in signal transduction during development.

During gastrulation in vertebrates, ectodermal cells choose between two fates, neural and epidermal. The nervous system forms in response to signals from the Spemann organizer; ectoderm that does not receive these signals becomes epidermis. Unexpectedly, however, in Xenopus, neural tissue also forms when cell-cell communication within the ectoderm is disrupted by cell dissociation or by antagonists of the growth factor activin. These observations suggest that epidermal specification depends on local signalling, by activin or a close relative, and that neural tissue forms when this communication is blocked. Here we report that bone morphogenesis protein 4 (Bmp-4), a relative of activin that is expressed in the embryo at the time of ectodermal fate determination, is a potent epidermal inducer and neural inhibitor, the first reported in any vertebrate. Activin can inhibit neuralization by inducing mesoderm, but does not induce epidermis. Moreover, the dominant-negative activin receptor, which stimulates neuralization when expressed in the embryo, blocks Bmp-4 in our assay. Our findings demonstrate that epidermal fate can be induced, and thus provide further evidence that neural specification is under inhibitory control in vertebrates.