Human embryonic stem cell-derived beta cells offer a promising cell-based therapy for diabetes. However, efficient stem cell to beta cell differentiation has proven difficult, possibly due to the lack of cross-talk with the appropriate mesenchymal niche. To define organ-specific niche signals, we isolated pancreatic and gastrointestinal stromal cells, and analyzed their gene expression during development. Our genetic studies reveal the importance of tightly regulated Hedgehog signaling in the pancreatic mesenchyme: inactivation of mesenchymal signaling leads to annular pancreas, whereas stroma-specific activation of signaling via loss of Hedgehog regulators, Sufu and Spop, impairs pancreatic growth and beta cell genesis. Genetic rescue and transcriptome analyses show that these Sufu and Spop knockout defects occur through Gli2-mediated activation of gastrointestinal stromal signals such as Wnt ligands. Importantly, inhibition of Wnt signaling in organoid and human stem cell cultures significantly promotes insulin-producing cell generation, altogether revealing the requirement for organ-specific regulation of stromal niche signals.

Highlights d Sufu and Spop modulate proliferation of gut embryonic progenitors d Mesenchymal Hh signaling plays a permissive role for villus formation d GLI2 directly induces expression of intestinal stromal stem cell niche signals d Mesenchymal reduction of Sufu promotes intestinal tumorigenesis

Transcription factors (TFs) are spatially and temporally regulated during gut organ specification. Although accumulating evidence shows aberrant reactivation of developmental programs in cancer, little is known about how TFs drive lineage specification in development and cancer. We first defined gastrointestinal tissue–specific chromatin accessibility and gene expression during development, identifying the dynamic epigenetic regulation of SOX family of TFs. We revealed that Sox2 is not only essential for gastric specification, by maintaining chromatin accessibility at forestomach lineage loci, but also sufficient to promote forestomach/esophageal transformation upon Cdx2 deletion. By comparing our gastrointestinal lineage-specific transcriptome to human gastrointestinal cancer data, we found that stomach and intestinal lineage-specific programs are reactivated in Sox2high/Sox9high and Cdx2high cancers, respectively. By analyzing mice deleted for both Sox2 and Sox9, we revealed their potentially redundant roles in both gastric development and cancer, highlighting the importance of developmental lineage programs reactivated by gastrointestinal TFs in cancer.