Ci antagonizes Hippo signaling in the somatic cells of the ovary to drive germline stem cell differentiation.

Many stem cell populations are tightly regulated by their local microenvironment (niche), which comprises distinct types of stromal cells. However, little is known about mechanisms by which niche subgroups coordinately determine the stem cell fate. Here we identify that Yki, the key Hippo pathway component, is essential for escort cell (EC) function in promoting germline differentiation in Drosophila ovary. We found that Hedgehog (Hh) signals emanating primarily from cap cells support the function of ECs, where Cubitus interruptus (Ci), the Hh signaling effector, acts to inhibit Hippo kinase cascade activity. Mechanistically, we found that Ci competitively interacts with Hpo and impairs the Hpo-Wts signaling complex formation, thereby promoting Yki nuclear localization. The actions of Ci ensure effective Yki signaling to antagonize Sd/Tgi/Vg-mediated default repression in ECs. This study uncovers a mechanism explaining how subgroups of niche cells coordinate to determine the stem cell fate via Hh-Hippo signaling crosstalk, and enhances our understanding of mechanistic regulations of the oncogenic Yki/YAP signaling.