Proper regulation of Indian hedgehog (Ihh) signaling is vital for chondrocyte proliferation and differentiation in the growth plate. Its dysregulation causes skeletal dysplasia, osteoarthritis or cartilaginous neoplasia. Here, we show that Suppressor of fused (Sufu) and Kif7 are essential regulators of Ihh signaling. While Sufu acts as a negative regulator of Gli transcription factors, Kif7 functions both positively and negatively in chondrocytes. Kif7 plays a role in the turnover of Sufu and the exclusion of Sufu-Gli complexes from the primary cilium. Importantly, halving the dose of Sufu restores normal hedgehog pathway activity and chondrocyte development in Kif7-null mice, demonstrating that the positive role of Kif7 is to restrict the inhibitory activity of Sufu. Furthermore, Kif7 also inhibits Gli transcriptional activity in the chondrocytes when Sufu function is absent. Therefore, Kif7 regulates the activity of Gli transcription factors through both Sufu-dependent and -independent mechanisms.

SUMMARYAbnormal activation of Hedgehog (Hh) signaling leads to basal cell carcinoma (BCC) of the skin, the most common human cancer. Gli2, the major transcriptional activator of Hh signaling, is essential for hair follicle development and its overexpression in epidermis induces BCC formation and maintains tumor growth. Despite its importance in skin development and tumorigenesis, little is known about the molecular regulation of Gli2. Sufu and Kif7 are two evolutionarily conserved regulators of Gli transcription factors. Here, we show that Sufu and Kif7 regulate Gli2 through distinct mechanisms in keratinocytes. Sufu restricts the activity of Gli2 through cytoplasmic sequestration. Kif7 possesses Sufu-dependent and -independent regulatory functions in Hh signaling: while it promotes Hh pathway activity through the dissociation of Sufu-Gli2 complex, it also contributes to the repression of Hh target genes in the absence of Sufu. Deletion of both Sufu and Kif7 in embryonic skin leads to complete loss of follicular fate. Importantly, although inactivation of Sufu or Kif7 alone in adult epidermis cannot promote BCC formation, their simultaneous deletion induces BCC. These studies establish Sufu and Kif7 as crucial components in the regulation of Gli2 localization and activity, and illustrate their overlapping functions in skin development and tumor suppression.

The Patched 1 (Ptch1) receptor has a pivotal role in inhibiting the activity of the Hedgehog (Hh) pathway and is therefore critical in preventing the onset of many human developmental disorders and tumor formation. However, the functional role of the mammalian Ptch2 paralogue remains elusive, particularly the extent to which it contributes to regulating the spatial and temporal activity of Hh signaling. Here we demonstrate in three independent mouse models of epidermal development that in vivo ablation of both Ptch receptors results in a more severe phenotype than loss of Ptch1 alone. Our studies indicate that concomitant loss of Ptch1 and Ptch2 activity inhibits epidermal lineage specification and differentiation. These results reveal that repression of Hh signaling through a dynamic Ptch regulatory network is a crucial event in lineage fate determination in the skin. In general, our findings implicate Ptch receptor redundancy as a key issue in elucidating the cellular origin of Hh-induced tumors.