AP2γ regulates neural and epidermal development downstream of the BMP pathway at early stages of ectodermal patterning.

Bone morphogenetic protein (BMP) inhibits neural specification and induces epidermal differentiation during ectodermal patterning. However, the mechanism of this process is not well understood. Here we show that AP2γ, a transcription factor activator protein (AP)-2 family member, is upregulated by BMP4 during neural differentiation of pluripotent stem cells. Knockdown of AP2γ facilitates mouse embryonic stem cell (ESC) neural fate determination and impairs epidermal differentiation, whereas AP2γ overexpression inhibits neural conversion and promotes epidermal commitment. In the early chick embryo, AP2γ is expressed in the entire epiblast before HH stage 3 and gradually shifts to the putative epidermal ectoderm during HH stage 4. In the future neural plate AP2γ inhibits excessive neural expansion and it also promotes epidermal development in the surface ectoderm. Moreover, AP2γ knockdown in ESCs and chick embryos partially rescued the neural inhibition and epidermal induction effects of BMP4. Mechanistic studies showed that BMP4 directly regulates AP2γ expression through Smad1 binding to the AP2γ promoter. Taken together, we propose that during the early stages of ectodermal patterning in the chick embryo, AP2γ acts downstream of the BMP pathway to restrict precocious neural expansion in the prospective neural plate and initiates epidermal differentiation in the future epidermal ectoderm.