Li+ acts as a specific inhibitor of the GSK-3 family of protein kinases in vitro and in intact cells, and mimics Wingless signalling. This reveals a possible molecular mechanism of Li+ action on development and differentiation.

The mechanisms involved in transduction of the Hedgehog (Hh) signal are of considerable interest to developmental and cancer biologists. Stabilization of the integral membrane protein Smoothened (Smo) at the plasma membrane is a crucial step in Hh signalling but the molecular events immediately downstream of Smo remain to be elucidated. We have shown previously that the transcriptional mediator Cubitus interruptus (Ci) is associated in a protein complex with at least two other proteins, the kinesin-like Costal2 (Cos2) and the serine-threonine kinase Fused (Fu). This protein complex governs the access of Ci to the nucleus. Here we show that, consequent on the stabilization of Smo, Cos2 and Fu are destabilized. Moreover, we find that the Cos2-Fu-Ci protein complex is associated with Smo in membrane fractions both in vitro and in vivo. We also show that Cos2 binding on Smo is necessary for the Hh-dependent dissociation of Ci from this complex. We propose that the association of the Cos2 protein complex with Smo at the plasma membrane controls the stability of the complex and allows Ci activation, eliciting its nuclear translocation.

Hedgehog family members are secreted proteins involved in numerous patterning mechanisms. Different posttranslational modifications have been shown to modulate Hedgehog biological activity. We investigated the role of these modifications in regulating subcellular localization of Hedgehog in the Drosophila embryonic epithelium. We demonstrate that cholesterol modification of Hedgehog is responsible for its assembly in large punctate structures and apical sorting through the activity of the sterol-sensing domain-containing Dispatched protein. We further show that movement of these specialized structures through the cellular field is contingent upon the activity of proteoglycans synthesized by the heparan sulfate polymerase Tout-Velu. Finally, we show that the Hedgehog large punctate structures are necessary only for a subset of Hedgehog target genes across the parasegmental boundary, suggesting that presentation of Hedgehog from different membrane compartments is responsible for Hedgehog functional diversity in epithelial cells.

The Hedgehog morphogen is a major developmental regulator that acts at short and long range to direct cell fate decisions in invertebrate and vertebrate tissues. Hedgehog is the only known metazoan protein to possess a covalently linked cholesterol moiety. Although the role of the cholesterol group of Hedgehog remains unclear, it has been suggested to be dispensable for the its long-range activity in Drosophila. Here, we provide data in three different epithelia -ventral and dorsal embryonic ectoderm, and larval imaginal disc tissue -showing that cholesterol modification is in fact necessary for the controlled long-range activity of Drosophila Hedgehog. We provide an explanation for the discrepancy between our results and previous reports by showing that unmodified Hh can act at long range, albeit in an uncontrolled manner, only when expressed in squamous cells. Our data show that cholesterol modification controls long-range Hh activity at multiple levels. First, cholesterol increases the affinity of Hh for the plasma membrane, and consequently enhances its apparent intrinsic activity, both in vitro and in vivo. In addition, multimerisation of active Hh requires the presence of cholesterol. These multimers are correlated with the assembly of Hh into apically located, large punctate structures present in active Hh gradients in vivo. By comparing the activity of cholesterol-modified Hh in columnar epithelial cells and peripodial squamous cells, we show that epithelial cells provide the machinery necessary for the controlled planar movement of Hh, thereby preventing the unrestricted spreading of the protein within the three-dimensional space of the epithelium. We conclude that, as in vertebrates, cholesterol modification is essential for controlled long-range Hh signalling in Drosophila.