Decapentaplegic (Dpp) plays an essential role in Drosophila development, and analyses of the Dpp signaling pathway have contributed greatly to understanding of the actions of the TGF-beta superfamily. Intracellular signaling of the TGF-beta superfamily is mediated by Smad proteins, which are now grouped into three classes. Two Smads have been identified in Drosophila. Mothers against dpp (Mad) is a pathway-specific Smad, whereas Daughters against dpp (Dad) is an inhibitory Smad genetically shown to antagonize Dpp signaling. Here we report the identification of a common mediator Smad in Drosophila, which is closely related to human Smad4. Mad forms a heteromeric complex with Drosophila Smad4 (Medea) upon phosphorylation by Thick veins (Tkv), a type I receptor for Dpp. Dad stably associates with Tkv and thereby inhibits Tkv-induced Mad phosphorylation. Dad also blocks hetero-oligomerization and nuclear translocation of Mad. We also show that Mad exists as a monomer in the absence of Tkv stimulation. Tkv induces homo-oligomerization of Mad, and Dad inhibits this step. Finally, we propose a model for Dpp signaling by Drosophila Smad proteins.

Background: Decapentaplegic (Dpp) is a member of the transforming growth factor-b superfamily. Dpp governs various developmental processes in Drosophila through the transcriptional regulation of a variety of genes. Signals of Dpp are transmitted from the cell membrane to the nucleus by Medea and Mad, both belonging to the Smad protein family. Mad was shown to bind to the Dpp-responsive element in genes such as vestigial, labial, and Ultrabithorax. The DNA binding af®nity of Smad proteins is relatively low, and requires other nuclear factor(s) to form stable DNA binding complexes. schnurri (shn) was identi®ed as a candidate gene acting downstream of

TGF-beta is a potent inhibitor of cell growth, and accumulating evidence suggests that perturbation of the TGF-beta signaling pathway leads to tumorigenesis. Smads are recently identified proteins that mediate intracellular signaling of the TGF-beta superfamily. Smads 2 and 3 are phosphorylated by the TGF-beta type I receptor. Smad4 was originally identified as a candidate tumor suppressor gene in pancreatic cancers. Smads 2 and 3 form complexes with Smad4 upon TGF-beta stimulation. The heteromeric Smad complexes translocate into the nucleus, where they activate expression of target genes. Our recent study demonstrated that Smads exist as monomers in the absence of TGF-beta. Smads 2 and 3 form homo- as well as hetero-oligomers with Smad4 upon ligand stimulation. Both homo-oligomers and hetero-oligomers directly bind to DNA, suggesting that the signaling pathway of Smads may be multiplex. Smads 2 and 3 associate with transcriptional coactivators such as p300 in a ligand-dependent manner, p300 enhances transactivation by TGF-beta, suggesting that coactivators link Smads to the basal transcriptional machinery. A missense mutation of Smad2 identified in colorectal and lung cancers was introduced to Smad3. The mutant, Smad3(DE), blocked the activation of wild-type Smad2 and Smad3. Thus, the missense mutation not only disrupts the function of the wild-type Smad but also creates a dominant-negative Smad, which could actively contribute to oncogenesis.

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