The cell-surface proteoglycan Dally regulates Wingless signalling in Drosophila.

Wingless (Wg) is a member of the Wnt family of growth factors, secreted proteins that control proliferation and differentiation during development. Studies in Drosophila have shown that responses to Wg require cell-surface heparan sulphate, a glycosaminoglycan component of proteoglycans. These findings suggest that a cell-surface proteoglycan is a component of a Wg/Wnt receptor complex. We demonstrate here that the protein encoded by the division abnormally delayed (dally) gene is a cell-surface, heparan-sulphate-modified proteoglycan. dally partial loss-of-function mutations compromise Wg-directed events, and disruption of dally function with RNA interference produces phenotypes comparable to those found with RNA interference of wg or frizzled (fz)/Dfz2. Ectopic expression of Dally potentiates Wg signalling without altering levels of Wg and can rescue a wg partial loss-of-function mutant. We also show that dally, a regulator of Decapentaplegic (Dpp) signalling during post-embryonic development, has tissue-specific effects on Wg and Dpp signalling. Dally can therefore differentially influence signalling mediated by two growth factors, and may form a regulatory component of both Wg and Dpp receptor complexes.