The dorsalizing and neural inducing gene follistatin is an antagonist of BMP-4.

Specific signaling molecules play a pivotal role in the induction and specification of tissues during early vertebrate embryogenesis. BMP-4 specifies ventral mesoderm differentiation and inhibits neural induction in Xenopus, whereas three molecules secreted from the organizer, noggin, follistatin and chordin dorsalize mesoderm and promote neural induction. Here we report that follistatin antagonizes the activities of BMP-4 in frog embryos and mouse teratocarcinoma cells. In Xenopus embryos follistatin blocks the ventralizing effect of BMP-4. In mouse P19 cells follistatin promotes neural differentiation. BMP-4 antagonizes the action of follistatin and prevents neural differentiation. In addition we show that the follistatin and BMP-4 proteins can interact directly in vitro. These data provide evidence that follistatin might play a role in modulating BMP-4 activity in vivo.