The transcriptional repressor CDP (Cutl1) is essential for epithelial cell differentiation of the lung and the hair follicle.

The mammalian Cutl1 gene codes for the CCAAT displacement protein (CDP), which has been implicated as a transcriptional repressor in diverse processes such as terminal differentiation, cell cycle progression, and the control of nuclear matrix attachment regions. To investigate the in vivo function of Cutl1, we have replaced the C-terminal Cut repeat 3 and homeodomain exons with an in-frame lacZ gene by targeted mutagenesis in the mouse. The CDP-lacZ fusion protein is retained in the cytoplasm and fails to repress gene transcription, indicating that the Cutl1(lacZ) allele corresponds to a null mutation. Cutl1 mutant mice on inbred genetic backgrounds are born at Mendelian frequency, but die shortly after birth because of retarded differentiation of the lung epithelia, which indicates an essential role of CDP in lung maturation. A less pronounced delay in lung development allows Cutl1 mutant mice on an outbred background to survive beyond birth. These mice are growth-retarded and develop an abnormal pelage because of disrupted hair follicle morphogenesis. The inner root sheath (IRS) is reduced, and the transcription of Sonic hedgehog and IRS-specific genes is deregulated in Cutl1 mutant hair follicles, consistent with the specific expression of Cutl1 in the progenitors and cell lineages of the IRS. These data implicate CDP in cell-lineage specification during hair follicle morphogenesis, which resembles the role of the related Cut protein in specifying cell fates during Drosophila development.