SUMMARY Deregulation of SHP2 is associated with malignant diseases as well as developmental disorders. Although SHP2 is required for full activation of RAS signaling, other potential roles in cell physiology have not been elucidated. Here we show that SHP2 dephosphorylates parafibromin/Cdc73, a core component of the RNA polymerase II-associated factor (PAF) complex. Parafibromin is known to act as a tumor suppressor that inhibits cyclin D1 and c-myc by recruiting SUV39H1 histone methyltransferase. However, parafibromin can also act in the opposing direction by binding β-catenin, thereby activating pro-mitogenic/oncogenic Wnt signaling. We found that, upon tyrosine dephosphorylation by SHP2, parafibromin acquires the ability to stably bind β-catenin. The parafibromin/β-catenin interaction overrides parafibromin/SUV39H1-mediated transrepression and induces expression of Wnt target genes, including cyclin D1 and c-myc. Hence, SHP2 governs the opposing functions of parafibromin, deregulation of which may cause the development of tumors or developmental malformations.

SHP2 is a ubiquitously expressed protein tyrosine phosphatase, deregulation of which is associated with malignant neoplasms and developmental disorders. SHP2 is required for full activation of RAS-Erk signaling in the cytoplasm and is also present in the nucleus, where it promotes Wnt target gene activation through dephosphorylation of parafibromin. SHP2 is distributed both to the cytoplasm and nucleus at low cell density but is excluded from the nucleus at high cell density. Here, we show that SHP2 physically interacts with transcriptional coactivators YAP and TAZ, targets of the cell-density-sensing Hippo signal. Through the interaction, nonphosphorylated YAP/TAZ promote nuclear translocalization of SHP2, which in turn stimulates TCF/LEF- and TEAD-regulated genes via parafibromin dephosphorylation. Conversely, YAP/TAZ phosphorylated by Hippo signaling sequester SHP2 in the cytoplasm, thereby preventing nuclear accumulation of SHP2. Hence, YAP/TAZ serve as a rheostat for nuclear SHP2 function, which is switched off by the Hippo signal.

Evolutionally conserved Wnt, Hedgehog (Hh) and Notch morphogen pathways play essential roles in the development, homeostasis and pathogenesis of multicellular organisms. Nevertheless, mechanisms that intracellularly coordinate these signal inputs remain poorly understood. Here we found that parafibromin, a component of the PAF complex, competitively interacts with β-catenin and Gli1, thereby potentiating transactivation of Wnt- and Hh-target genes in a mutually exclusive manner. Parafibromin also binds to the Notch intracellular domain (NICD), enabling concerted activation of Wnt- and Notch-target genes. The transcriptional platform function of parafibromin is potentiated by tyrosine dephosphorylation, mediated by SHP2 phosphatase, while it is attenuated by tyrosine phosphorylation, mediated by PTK6 kinase. Consequently, acute loss of parafibromin in mice disorganizes the normal epithelial architecture of the intestine, which requires coordinated activation/inactivation of Wnt, Hh and/or Notch signalling. Parafibromin integrates and converts signals conveyed by these morphogen pathways into appropriate transcriptional outputs in a tyrosine phosphorylation/dephosphorylation-regulated manner.

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SummaryYAP and TAZ, the Hippo signal-regulated transcriptional co-activators, play crucial roles in morphogenesis and organogenesis. Here we report that the YAP/TAZ activities are stimulated upon complex formation with Parafibromin, which undergoes tyrosine phosphorylation and dephosphorylation by kinases such as PTK6 and phosphatases such as SHP2, respectively. Furthermore, TAZ and the Wnt effector β-catenin interact cooperatively with tyrosine-dephosphorylated Parafibromin, which synergistically stimulates the co-activator functions of TAZ and β-catenin. On the other hand, YAP is selectively activated through binding with tyrosine-phosphorylated Parafibromin, which does not interact with β-catenin and thus cannot co-activate YAP and β-catenin. These findings indicate that Parafibromin inversely regulates the activities of YAP and TAZ depending on its tyrosine phosphorylation status. They also suggest that YAP and TAZ exert their redundant and non-redundant biological actions through mutually exclusive interaction with Parafibromin, which is regulated by a balance of kinase and phosphatase activities toward Parafibromin.