wingless and decapentaplegic signal during endoderm induction in Drosophila to regulate expression of the homeotic gene Ultrabithorax. Here, we define a minimal wingless response sequence in the midgut enhancer of Ultrabithorax. We show that this sequence is recognized by the murine transcription factor LEF-1 (lymphocyte enhancer binding factor 1) in a ternary complex with armadillo protein, the cytoplasmic target of the wingless signaling pathway. In stable transformants, transcriptional stimulation of the Ultrabithorax enhancer by LEF-1 depends on armadillo. Furthermore, overexpression of LEF-1 bypasses the need for wingless signaling and causes phenotypes in the midgut, notum, and wing that mimic wingless hyperstimulation. Finally, efficient transcriptional stimulation by LEF-1 in the midgut depends also on the decapentaplegic response sequence and is limited spatially by decapentaplegic signaling. Thus, LEF-1 coordinates inputs from multiple positional signals, consistent with its architectural role in regulating the assembly of multiprotein enhancer complexes.

Decapentaplegic (Dpp) is an extracellular signal of the transforming growth factor‐β family with multiple functions during Drosophila development. For example, it plays a key role in the embryo during endoderm induction. During this process, Dpp stimulates transcription of the homeotic genes Ultrabithorax in the visceral mesoderm and labial in the subjacent endoderm. Here, we show that a cAMP response element (CRE) from an Ultrabithorax enhancer mediates Dpp‐responsive transcription in the embryonic midgut, and that endoderm expression from a labial enhancer depends on multiple CREs. Furthermore, the Drosophila CRE‐binding protein dCREB‐B binds to the Ultrabithorax CRE, and ubiquitous expression of a dominant‐negative form of dCREB‐B suppresses CRE‐mediated reporter gene expression and reduces labial expression in the endoderm. Therefore, a CREB protein may act as a nuclear target, or as a partner of a nuclear target, for Dpp signalling in the embryonic midgut.

Endoderm induction in Drosophila is mediated by the extracellular signals Decapentaplegic (Dpp) and Wingless (Wg). We discovered a secondary signal with a permissive role in this process, namely Vein, a neuregulin-like ligand that stimulates the epidermal growth factor receptor (EGFR) and Ras signaling. Dpp and Wg up-regulate vein expression in the midgut mesoderm in two regions overlapping the Dpp sources. Experiments based on lack of function and ectopic stimulation of Dpp and EGFR signaling show that these two pathways are functionally interdependent and that they synergize with each other, revealing functional intertwining. The transcriptional response elements for the Dpp signal in midgut enhancers from homeotic target genes are bipartite, comprising CRE sites as well as binding sites for the Dpp signal-transducing protein Mad. Of these sites, the CRE seems to function primarily in the response to Ras, the secondary signal of Dpp. We discuss the potential significance of why an inductive process might use a secondary signal whose function is intertwined with that of the primary signal.

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