Ci/Gli zinc finger proteins mediate the transcriptional effects of Hedgehog protein signals. In Drosophila, Ci action as transcriptional repressor or activator is contingent upon Hedgehog-regulated, PKA-dependent proteolytic processing. We demonstrate that PKA-dependent processing of vertebrate Gli3 in developing limb similarly generates a potent repressor in a manner antagonized by apparent long-range signaling from posteriorly localized Sonic hedgehog protein. The resulting anterior/posterior Gli3 repressor gradient can be perturbed by mutations of Gli3 in human genetic syndromes or by misregulation of Gli3 processing in the chicken mutant talpid2, producing a range of limb patterning malformations. The high relative abundance and potency of Gli3 repressor suggest specialization of Gli3 and its products for negative Hedgehog pathway regulation.

Intraflagellar transport (IFT) is an active event in which cargo is transported along microtubules by motor proteins such as kinesin and dynein. IFT proteins are required for the formation and maintenance of flagella and cilia. We have previously shown that mouse mutants for two IFT proteins, IFT88 and IFT172, as well as Kif3a, a subunit of mouse kinesin 2, exhibit ventral spinal cord patterning defects that appear to result from reduced hedgehog(Hh) signaling. Although genetic epistasis experiments place IFT proteins downstream of the Hh receptor and upstream of the Gli transcription factors,the mechanism by which IFT regulates Gli function is unknown. The developing limb provides an excellent system to study Hh signaling, in particular as it allows a biological and molecular readout of both Gli activator and repressor function. Here we report that homozygous mutants for flexo (Fxo), a hypomorphic allele of mouse IFT88 generated in our ENU mutagenesis screen, exhibit polydactyly in all four limbs. Molecular analysis indicates that expression domains of multiple posteriorly restricted genes are expanded anteriorly in the mutant limbs, similar to loss of Gli3 transcriptional repressor function. Sonic hedgehog (Shh) expression is normal, yet Ptch1 and Gli1, two known targets of Hh signaling, are greatly reduced, consistent with loss of Shh signaling. Expression of Gli3 and Hand2 in the mutant limb indicates that the limb prepattern is abnormal. In addition, we show that partial loss-of-function mutations in another mouse IFT gene, Ift52(Ngd5), result in similar phenotypes and abnormal Hh signaling as Fxo, indicating a general requirement for IFT proteins in Hh signaling and patterning of multiple organs. Analysis of Ift88 and Shh double mutants indicates that, in mouse, IFT proteins are required for both Gli activator and repressor functions, and Gli proteins are insensitive to Hh ligand in the absence of IFT proteins. Finally, our biochemical studies demonstrate that IFT proteins are required for proteolytic processing of Gli3 in mouse embryos. In summary, our results indicate that IFT function is crucial in the control of both the positive and negative transcriptional activities of Gli proteins, and essential for Hh ligand-induced signaling cascade.

Gli2 and Gli3 are the primary transcription factors that mediate Sonic hedgehog (Shh) signals in the mouse. Gli3 mainly acts as a transcriptional repressor, because the majority of full-length Gli3 protein is proteolytically processed. Gli2 is mostly regarded as a transcriptional activator, even though it is also suggested to have a weak repressing activity. What the molecular basis for its possible dual function is and how its activity is regulated by Shh signaling are largely unknown. Here we demonstrate that unlike the results seen with Gli3 and Cubitus Interruptus, the fly homolog of Gli, only a minor fraction of Gli2 is proteolytically processed to form a transcriptional repressor in vivo and that in addition to being processed, Gli2 full-length protein is readily degraded. The degradation of Gli2 requires the phosphorylation of a cluster of numerous serine residues in its carboxyl terminus by protein kinase A and subsequently by casein kinase 1 and glycogen synthase kinase 3. The phosphorylated Gli2 interacts directly with ␤TrCP in the SCF ubiquitin-ligase complex through two binding sites, which results in Gli2 ubiquitination and subsequent degradation by the proteasome. Both processing and degradation of Gli2 are suppressed by Shh signaling in vivo. Our findings provide the first demonstration of a molecular mechanism by which the Gli2 transcriptional activity is regulated by Shh signaling.

The seven-transmembrane protein Smoothened (Smo) transduces extracellular activation of the Hedgehog (Hh) pathway by an unknown mechanism to increase transcriptional activity of the latent cytoplasmic transcription factor Ci (Cubitus interruptus). Here, we present evidence that Smo associates directly with a Ci-containing complex that is scaffolded and stabilized by the atypical kinesin, Costal-2 (Cos2). This complex constitutively suppresses pathway activity, but Hh signaling reverses its regulatory effect to promote Ci-mediated transcription. In response to Hh activation of Smo, Cos2 mediates accumulation and phosphorylation of Smo at the membrane as well as phosphorylation of the cytoplasmic components Fu and Su(fu). Positive response of Cos2 to Hh stimulation requires a portion of the Smo cytoplasmic tail and the Cos2 cargo domain, which interacts directly with Smo.