The Spemann organizer in amphibian embryos is a tissue with potent head-inducing activity, the molecular nature of which is unresolved. Here we describe dickkopf-1 (dkk-1), which encodes Dkk-1, a secreted inducer of Spemann's organizer in Xenopus and a member of a new protein family. Injections of mRNA and antibody indicate that dkk-1 is sufficient and necessary to cause head induction. dkk-1 s a potent antagonist of Wnt signalling, suggesting that dkk genes encode a family of secreted Wnt inhibitors.

The Wnt family of secreted glycoproteins mediate cell cell interactions during cell growth and differentiation in both embryos and adults. Canonical Wnt signalling by way of the beta-catenin pathway is transduced by two receptor families. Frizzled proteins and lipoprotein-receptor-related proteins 5 and 6 (LRP5/6) bind Wnts and transmit their signal by stabilizing intracellular beta-catenin. Wnt/beta-catenin signalling is inhibited by the secreted protein Dickkopf1 (Dkk1), a member of a multigene family, which induces head formation in amphibian embryos. Dkk1 has been shown to inhibit Wnt signalling by binding to and antagonizing LRP5/6. Here we show that the transmembrane proteins Kremen1 and Kremen2 are high-affinity Dkk1 receptors that functionally cooperate with Dkk1 to block Wnt/beta-catenin signalling. Kremen2 forms a ternary complex with Dkk1 and LRP6, and induces rapid endocytosis and removal of the Wnt receptor LRP6 from the plasma membrane. The results indicate that Kremen1 and Kremen2 are components of a membrane complex modulating canonical Wnt signalling through LRP6 in vertebrates.

Members of the transforming growth factor-beta (TGF-beta) superfamily, including TGF-beta, bone morphogenetic proteins (BMPs), activins and nodals, are vital for regulating growth and differentiation. These growth factors transduce their signals through pairs of transmembrane type I and type II receptor kinases. Here, we have cloned a transmembrane protein, BAMBI, which is related to TGF-beta-family type I receptors but lacks an intracellular kinase domain. We show that BAMBI is co-expressed with the ventralizing morphogen BMP4 (refs 5, 6) during Xenopus embryogenesis and that it requires BMP signalling for its expression. The protein stably associates with TGF-beta-family receptors and inhibits BMP and activin as well as TGF-beta signalling. Finally, we provide evidence that BAMBI's inhibitory effects are mediated by its intracellular domain, which resembles the homodimerization interface of a type I receptor and prevents the formation of receptor complexes. The results indicate that BAMBI negatively regulates TGF-beta-family signalling by a regulatory mechanism involving the interaction of signalling receptors with a pseudoreceptor.