Tiki1 is required for head formation via Wnt cleavage-oxidation and inactivation.

Secreted Wnt morphogens are signaling molecules essential for embryogenesis, pathogenesis, and regeneration and require distinct modifications for secretion, gradient formation, and activity. Whether Wnt proteins can be posttranslationally inactivated during development and homeostasis is unknown. Here we identify, through functional cDNA screening, a transmembrane protein Tiki1 that is expressed specifically in the dorsal Spemann-Mangold Organizer and is required for anterior development during Xenopus embryogenesis. Tiki1 antagonizes Wnt function in embryos and human cells via a TIKI homology domain that is conserved from bacteria to mammals and acts likely as a protease to cleave eight amino-terminal residues of a Wnt protein, resulting in oxidized Wnt oligomers that exhibit normal secretion but minimized receptor-binding capability. Our findings identify a Wnt-specific protease that controls head formation, reveal a mechanism for morphogen inactivation through proteolysis-induced oxidation-oligomerization, and suggest a role of the Wnt amino terminus in evasion of oxidizing inactivation. TIKI proteins may represent potential therapeutic targets.