Palmitoylation of Sonic Hedgehog (Shh) is critical for effective long-and short-range signaling. Genetic screens uncovered a potential palmitoylacyltransferase (PAT) for Shh, Hhat, but the molecular mechanism of Shh palmitoylation remains unclear. Here, we have developed and exploited an in vitro Shh palmitoylation assay to purify Hhat to homogeneity. We provide direct biochemical evidence that Hhat is a PAT with specificity for attaching palmitate via amide linkage to the N-terminal cysteine of Shh. Other palmitoylated proteins (e.g. PSD95 and Wnt) are not substrates for Hhat, and Porcupine, a putative Wnt PAT, does not palmitoylate Shh. Neither autocleavage nor cholesterol modification is required for Shh palmitoylation. Both the Shh precursor and mature protein are N-palmitoylated by Hhat, and the reaction occurs during passage through the secretory pathway. This study establishes Hhat as a bona fide Shh PAT and serves as a model for understanding how secreted morphogens are modified by distinct PATs.

The Obg nucleotide binding protein family has been implicated in stress response, chromosome partitioning, replication initiation, mycelium development, and sporulation. Obg proteins are among a large group of GTP binding proteins conserved from bacteria to man. Members of the family contain two equally and highly conserved domains, a C-terminal GTP binding domain and an N-terminal glycine-rich domain. Structural analysis of Bacillus subtilis Obg revealed respective domain architectures and how they are coupled through the putative switch elements of the C-terminal GTPase domain in apo and nucleotide-bound configurations. Biochemical analysis of bacterial and human Obg proteins combined with the structural observation of the ppGpp nucleotide within the Obg active sight suggest a potential role for ppGpp modulation of Obg function in B. subtilis.

Lipid modifications such as palmitoylation or myristoylation target intracellular proteins to cell membranes. Secreted ligands of the Hedgehog and Wnt families are also palmitoylated; this modification, which requires the related transmembrane acyltransferases Rasp and Porcupine, can enhance their secretion, transport, or activity. We show here that rasp is also essential for the developmental functions of Spitz, a ligand for the Drosophila epidermal growth factor receptor (EGFR). In cultured cells, Rasp promotes palmitate addition to the N-terminal cysteine residue of Spitz, and this cysteine is required for Spitz activity in vivo. Palmitoylation reduces Spitz secretion and enhances its plasma membrane association, but does not alter its ability to activate the EGFR in vitro. In vivo, overexpressed unpalmitoylated Spitz has an increased range of action but reduced activity. These data suggest a role for palmitoylation in restricting Spitz diffusion, allowing its local concentration to reach the threshold required for biological function.

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