The BMP-binding protein Crossveinless 2 is a short-range, concentration-dependent, biphasic modulator of BMP signaling in Drosophila.

In Drosophila, the secreted BMP-binding protein Short gastrulation (Sog) inhibits signaling by sequestering BMPs from receptors, but enhances signaling by transporting BMPs through tissues. We show that Crossveinless 2 (Cv-2) is also a secreted BMP-binding protein that enhances or inhibits BMP signaling. Unlike Sog, however, Cv-2 does not promote signaling by transporting BMPs. Rather, Cv-2 binds cell surfaces and heparan sulfate proteoglygans and acts over a short range. Cv-2 binds the type I BMP receptor Thickveins (Tkv), and we demonstrate how the exchange of BMPs between Cv-2 and receptor can produce the observed biphasic response to Cv-2 concentration, where low levels promote and high levels inhibit signaling. Importantly, we show also how the concentration or type of BMP present can determine whether Cv-2 promotes or inhibits signaling. We also find that Cv-2 expression is controlled by BMP signaling, and these combined properties enable Cv-2 to exquisitely tune BMP signaling.