During animal development, cells have to respond appropriately to localized secreted signals. Proper responses to Hedgehog, transforming growth factor-beta, epidermal growth factor and fibroblast growth factor/Ras signals require cognate inducible antagonists such as Patched, Dad, Argos and Sprouty. Wnt signals are crucial in development and neoplasia. Here we show that naked cuticle (nkd), a Drosophila segment-polarity gene, encodes an inducible antagonist for the Wnt signal Wingless (Wg). In fly embryos and imaginal discs nkd transcription is induced by Wg. In embryos, decreased nkd function has an effect similar to excess Wg; at later stages such a decrease appears to have no effect. Conversely, overproduction of Nkd in Drosophila and misexpression of Nkd in the vertebrate Xenopus laevis result in phenotypes resembling those of loss of Wg/Wnt function. nkd encodes a protein with a single EF hand (a calcium-binding motif) that is most similar to the recoverin family of myristoyl switch proteins. Nkd may therefore link ion fluxes to the regulation of the potency, duration or distribution of Wnt signals. Signal-inducible feedback antagonists such as nkd may limit the effects of Wnt proteins in development and disease.

In Drosophila embryos the protein Naked cuticle (Nkd) limits the effects of the Wnt signal Wingless (Wg) during early segmentation. nkd loss of function results in segment polarity defects and embryonic death, but how nkd affects Wnt signaling is unknown. Using ectopic expression, we find that Nkd affects, in a cell-autonomous manner, a transduction step between the Wnt signaling components Dishevelled (Dsh) and Zeste-white 3 kinase (Zw3 Secreted Wnt proteins act as potent mitogens and cellfate regulators in organisms ranging from nematodes to humans. In vertebrates they specify cell fate and control growth in a variety of developmental processes, including brain development, limb formation, axis specification, and gastrulation (for review, see Cadigan and Nusse 1997). In the fruit fly Drosophila, the Wnt protein Wingless (Wg) establishes segment polarity during embryogenesis and is involved in multiple additional patterning events throughout later development (Cadigan and Nusse 1997). wg is first expressed in the developing epidermis in stripes just anterior to cells expressing the engrailed (en) gene and is necessary to maintain en transcription (DiNardo et al. 1988;Martinez Arias et al. 1988). hedgehog (hh) is expressed in the en-expressing cells and positively regulates wg expression in the anterior cells (Ingham et al. 1991;Lee et al. 1992). This positive-feedback loop establishes parasegmental boundaries, the first evidence of the metameric organization of the embryo, between wg-and en/hh-expressing cells. At later stages of embryonic development, a tight balance between Wg and other signaling pathways, such as the Drosophila epidermal growth factor receptor (EGFR), determines whether epidermal cells secrete either naked (smooth) cuticle or hair-like structures called denticles (Dougan and DiNardo 1992;O'Keefe et al. 1997;Szuts et al. 1997). In the absence of wg function, embryos are covered with a lawn of denticles, whereas otherwise wild-type embryos exposed to excess Wg produce a naked cuticle (Martinez Arias et al. 1988;Noordermeer et al. 1992).Genetic and biochemical studies have lead to the identification of the key components of the Wnt/Wg pathway and have uncovered some of the molecular events that are involved in signal transduction (Fig. 1A). Wg binds 7-pass transmembrane receptors of the frizzled family (Fz or Dfz2), which, in turn, activate the cytoplasmic protein Dishevelled (Dsh; Theisen et al. 1994;Bhanot et al. 1996). Dsh antagonizes the activity of a large protein complex that, in the absence of Wg signal, results in Armadillo (Arm)/␤-catenin phosphorylation and subsequent degradation by the ubiquitin-proteasome pathway (Yost et al. 1996;Aberle et al. 1997;Pai et al. 1997). This multiprotein complex includes Zw3/Glycogen synthase kinase 3␤ (Gsk3␤), Adenomatous Polyposis Coli (APC), Axin, and Arm/␤-catenin. Axin constitutes the core of this complex, al-

A wound is a type of injury that damages living tissues. In this review, we will be referring mainly to healing responses in the organs including skin and the lungs. Fibrosis is a process of dysregulated extracellular matrix (ECM) production that leads to a dense and functionally abnormal connective tissue compartment (dermis). In tissues such as the skin, the repair of the dermis after wounding requires not only the fibroblasts that produce the ECM molecules, but also the overlying epithelial layer (keratinocytes), the endothelial cells, and smooth muscle cells of the blood vessel and white blood cells such as neutrophils and macrophages, which together orchestrate the cytokine-mediated signaling and paracrine interactions that are required to regulate the proper extent and timing of the repair process. This review will focus on the importance of extracellular molecules in the microenvironment, primarily the proteoglycans and glycosaminoglycan hyaluronan, and their roles in wound healing. First, we will briefly summarize the physiological, cellular, and biochemical elements of wound healing, including the importance of cytokine cross-talk between cell types. Second, we will discuss the role of proteoglycans and hyaluronan in regulating these processes. Finally, approaches that utilize these concepts as potential therapies for fibrosis are discussed.