Dullard promotes degradation and dephosphorylation of BMP receptors and is required for neural induction.

Bone morphogenetic proteins (BMPs) regulate multiple biological processes, including cellular proliferation, adhesion, differentiation, and early development. In Xenopus development, inhibition of the BMP pathway is essential for neural induction. Here, we report that dullard, a gene involved in neural development, functions as a negative regulator of BMP signaling. We show that Dullard promotes the ubiquitin-mediated proteosomal degradation of BMP receptors (BMPRs). Dullard preferentially complexes with the BMP type II receptor (BMPRII) and partially colocalizes with the caveolin-1-positive compartment, suggesting that Dullard promotes BMPR degradation via the lipid raft-caveolar pathway. Dullard also associates with BMP type I receptors and represses the BMP-dependent phosphorylation of the BMP type I receptor. The phosphatase activity of Dullard is essential for the degradation of BMP receptors and neural induction in Xenopus. Together, these observations suggest that Dullard is an essential inhibitor of BMP receptor activation during Xenopus neuralization.