Default repression and Notch signaling: Hairless acts as an adaptor to recruit the corepressors Groucho and dCtBP to Suppressor of Hairless.

The DNA-binding transcription factor Suppressor of Hairless [Su(H)] functions as an activator during Notch (N) pathway signaling, but can act as a repressor in the absence of signaling. Hairless (H), a novel Drosophila protein, binds to Su(H) and has been proposed to antagonize N signaling by inhibiting DNA binding by Su(H). Here we show that, in vitro, H directly binds two corepressor proteins, Groucho (Gro) and dCtBP. Reduction of gro or dCtBP function enhances H mutant phenotypes and suppresses N phenotypes in the adult mechanosensory bristle. This activity of gro is surprising, because it is directed oppositely to its traditionally defined role as a neurogenic gene. We find that Su(H)-H complexes can bind to DNA with high efficiency in vitro. Furthermore, a H-VP16 fusion protein causes dominant-negative phenotypes in vivo, a result consistent with the proposal that H functions in transcriptional repression. Taken together, our findings indicate that "default repression" of N pathway target genes by an unusual adaptor/corepressor complex is essential for proper cell fate specification during Drosophila peripheral nervous system development.