Although Merlin/NF2 was discovered two decades ago as a tumor suppressor underlying Neurofibromatosis type II, its precise molecular mechanism remains poorly understood. Recent studies in Drosophila revealed a potential link between Merlin and the Hippo pathway by placing Merlin genetically upstream of the kinase Hpo/Mst. In contrast to the commonly depicted linear model of Merlin functioning through Hpo/Mst, here we show that in both Drosophila and mammals, Merlin promotes downstream Hippo signaling without activating the intrinsic kinase activity of Hpo/Mst. Instead, Merlin directly binds and recruits the effector kinase Wts/Lats to plasma membrane. Membrane recruitment, in turn, promotes Wts phosphorylation by the Hpo-Sav kinase complex. We further show that disruption of the actin cytoskeleton promotes Merlin-Wts interactions, which implicates Merlin in actin-mediated regulation of Hippo signaling. Our findings elucidate an important molecular function of Merlin and highlight the plasma membrane as a critical subcellular compartment for Hippo signal transduction.

The Hippo signaling pathway regulates organ size and tissue homeostasis from Drosophila to mammals. At the core of the Hippo pathway is a kinase cascade extending from the Hippo (Hpo) tumor suppressor to the Yorkie (Yki) oncoprotein. The Hippo kinase cascade, in turn, is regulated by apical membrane-associated proteins such as the FERM domain proteins Merlin and Expanded (Ex), and the WW- and C2-domain protein Kibra. How these apical proteins are themselves regulated remains poorly understood. Here, we identify the transmembrane protein Crumbs (Crb), a determinant of epithelial apical-basal polarity in Drosophila embryos, as an upstream component of the Hippo pathway in imaginal disk growth control. Loss of Crb leads to tissue overgrowth and target gene expression characteristic of defective Hippo signaling. Crb directly binds to Ex through its juxtamembrane FERM-binding motif (FBM). Loss of Crb or mutation of its FBM leads to mislocalization of Ex to basolateral domain of imaginal disk epithelial cells. These results shed light on the mechanism of Ex regulation and provide a molecular link between apical-basal polarity and tissue growth. Furthermore, our studies implicate Crb as a putative cell surface receptor for Hippo signaling by uncovering a transmembrane protein that directly binds to an apical component of the Hippo pathway.

The Hippo tumor suppressor pathway restricts tissue growth by inactivating the transcriptional coactivator Yki. Although Sd has been implicated as a DNA-binding transcription factor partner for Yki and can genetically account for gain-of-function Yki phenotypes, how Yki regulates normal tissue growth remains a long-standing puzzle since Sd, unlike Yki, is dispensable for normal growth in most Drosophila tissues. Here we show that the yki mutant phenotypes in multiple developmental contexts are rescued by inactivation of Sd, suggesting that Sd functions as a default repressor and that Yki promotes normal tissue growth by relieving Sd-mediated default repression. We further identify Tgi as a cofactor involved in Sd's default repressor function and demonstrate that the mammalian orthologue of Tgi potently suppresses the YAP oncoprotein in transgenic mice. These findings fill a major gap in Hippo-mediated transcriptional regulation and open up new possibilities for modulating the YAP oncoprotein in cancer and regenerative medicine.