The carboxy terminus of Prospero regulates its subcellular localization.

Subcellular localization of the transcription factor Prospero is dynamic. For example, the protein is cytoplasmic in neuroblasts, nuclear in sheath cells, and degraded in newly formed neurons. The carboxy terminus of Prospero, including the homeodomain and Prospero domain, plays roles in regulating these changes. The homeodomain has two distinct subdomains, which exclude proteins from the nucleus, while the intact homeo/Prospero domain masks this effect. One subdomain is an Exportin-dependent nuclear export signal requiring three conserved hydrophobic residues, which models onto helix 1. Another, including helices 2 and 3, requires proteasome activity to degrade nuclear protein. Finally, the Prospero domain is missing in pros(I13) embryos, thus unmasking nuclear exclusion, resulting in constitutively cytoplasmic protein. Multiple processes direct Prospero regulation of cell fate in embryonic nervous system development.