Smad4 and beta-catenin co-activators functionally interact with lymphoid-enhancing factor to regulate graded expression of Msx2.

Recent in vivo evidence suggests that Wnt signaling plays a central role in determining the fate of stem cells in the ectoderm and in the neural crest by modulating bone morphogenetic protein (BMP) levels, which, in turn, influence Msx gene expression. However, the molecular mechanism regulating the expression of the Msx genes as key regulators of cell fate has not been elucidated. Here we show in murine embryonic stem cells that BMP-dependent activation of Msx2 is mediated via the cooperative binding of Smad4 at two Smad binding elements and of lymphoid enhancing factor (Lef1) at two Lef1/TCF binding sites. Lef1 can synergize with Smad4 and Smad1 to activate Msx2 promoter, and this transcriptional complex is assembled on the endogenous promoter in response to BMP2. The Wnt/beta-catenin signaling pathway can activate Msx2 via the binding of Lef1 to its promoter and synergizes with BMP2 to activate Msx2 expression, possibly via enhanced recruitment of the p300/cAMP-response element-binding protein-binding protein co-factor. Interestingly, the Wnt/beta-catenin-dependent activation of Msx2 was defective in Smad4-deficient embryonic stem cells or when Smad binding elements were mutated but persisted in the presence of various BMP antagonists, indicating that Smad4 was involved in transducing the Wnt/beta-catenin signals in the absence of a BMP autocrine loop. A chromatin immunoprecipitation analysis revealed that endogenous Smad4, but not Smad1, was part of the Lef1 transcriptional complex in response to beta-catenin activation, dismissing any implication of BMP signaling in this response. We propose that Wnt signaling pathway could dictate cell fate not only by modulating BMP levels but also by directly regulating cooperatively BMP-target genes.