The Sonic hedgehog (Shh) pathway controls embryonic development and tissue homeostasis after birth. Long-lasting questions about this pathway are how dual-lipidated, firmly plasma membrane-associated Shh ligand is released from producing cells to signal to distant target cells, and how the resistance-nodulation-division transporter Dispatched (Disp) regulates this process. Here we show that Disp inactivation in Shh expressing cells impairs proteolytic Shh release from its lipidated terminal peptides, a process called ectodomain shedding. We also show reduced cholesterol export from Disp-deficient cells, that these cells contain increased cholesterol amounts in the plasma membrane, and that Shh shedding from Disp-deficient cells is restored by pharmacological membrane cholesterol extraction and by overexpressed transgenic Disp or structurally related Patched (Ptc, a putative cholesterol transporter). These data suggest that Disp can regulate Shh function via controlled cell surface shedding and that membrane cholesterol-related molecular mechanisms shared by Disp and Ptc exercise such sheddase control.

Cellular differentiation is directly determined by concentration gradients of morphogens. As a central model for gradient formation during development, Hedgehog (Hh) morphogens spread away from their source to direct growth and pattern formation in Drosophila wing and eye discs. What is not known is how extracellular Hh spread is achieved and how it translates into precise gradients. Here we show that two separate binding areas located on opposite sides of the Hh molecule can interact directly and simultaneously with two heparan sulfate (HS) chains to temporarily cross-link the chains. Mutated Hh lacking one fully functional binding site still binds HS but shows reduced HS cross-linking. This, in turn, impairs Hhs ability to switch between both chains in vitro and results in striking Hh gradient hypomorphs in vivo. The speed and propensity of direct Hh switching between HS therefore shapes the Hh gradient, revealing a scalable design principle in morphogen-patterned tissues.

The Sonic hedgehog (Shh) signaling pathway controls embryonic development and tissue homeostasis after birth. This requires regulated solubilization of dual-lipidated, firmly plasma membrane-associated Shh precursors from producing cells. Although it is firmly established that the resistance-nodulation-division transporter Dispatched (Disp) drives this process, it is less clear how lipidated Shh solubilization from the plasma membrane is achieved. We previously showed that Disp enhances proteolytic Shh solubilization from its lipidated terminal peptide anchors. This process, called shedding, converts tightly membrane-associated hydrophobic Shh precursors into delipidated soluble proteins. We show here that Disp-mediated Shh shedding is modulated by a serum factor that we identify as high-density lipoprotein (HDL). In addition to serving as soluble sinks for free membrane cholesterol, HDLs also accept the cholesterol-modified Shh peptide from Disp. The cholesteroylated Shh peptide is required and sufficient for Disp-mediated transfer because mCherry linked to cholesteroylated peptides associates with HDL in a Disp-dependent manner, but an N-palmitoylated Shh variant that lacks C-cholesterol does not. Disp-mediated Shh transfer to HDL is finalized by proteolytic processing of the palmitoylated N-terminal membrane anchor. The resulting mono-lipidated Shh variant may help meet the demands for Hh activity regulation in different cell types and developing tissues.

Morphogens determine cellular differentiation in many developing tissues in a concentration dependent manner. As a central model for gradient formation during animal development, Hedgehog (Hh) morphogens spread away from their source to direct growth and pattern formation in the Drosophila wing disc. Although heparan sulfate (HS) expression in the disc is essential for this process, it is not known whether HS regulates Hh signaling and spread in a direct or in an indirect manner. To answer this question, we systematically screened two composite Hh binding areas for HS in vitro and expressed mutated proteins in the Drosophila wing disc. We found that selectively impaired HS binding of the second site reduced Hh signaling close to the source and caused striking wing mispatterning phenotypes more distant from the source. These observations suggest that HS constrains Hh to the wing disc epithelium in a direct manner, and that interfering with this constriction converts Hh into freely diffusing forms with altered signaling ranges and impaired gradient robustness.

Patterns of gene expression, cell growth and cell-type specification during development are often regulated by morphogens. Morphogens are signalling molecules produced by groups of source cells located tens to hundreds of micrometers distant from the responding tissue and are thought to regulate the fate of receiving cells in a direct, concentration-dependent manner. The mechanisms that underlie scalable yet robust morphogen spread to form the activity gradient, however, are not well understood and are currently intensely debated. Here, based on two recent publications, we review two in vivo derived concepts of regulated gradient formation of the morphogen Hedgehog (Hh). In the first concept, Hh disperses on the apical side of developing epithelial surfaces using the same mechanistic adaptations of molecular transport that DNA-binding proteins in the nucleus use. In the second concept, Hh is actively conveyed to target cells via long filopodial extensions, called cytonemes. Both concepts require the expression of a family of sugar-modified proteins in the gradient field called heparan sulphate proteoglycans as a prerequisite for Hh dispersal, yet propose different — direct versus indirect — roles of these essential extracellular modulators.