Both inhibition and activation of Notch signaling rely on a conserved Neuralized-binding motif in Bearded proteins and the Notch ligand Delta

Lateral inhibition is one of the key functions of Notch signaling during animal development. In the proneural clusters that give rise to Drosophila mechanosensory bristles, Delta (Dl) ligand in the sensory organ precursor (SOP) cell is targeted for ubiquitination by the E3 ligase Neuralized (Neur), resulting in activation of Dl's capacity to signal to the Notch receptor on neighboring cells. The cells that receive this signal activate a genetic program that suppresses their SOP fate potential, insuring that only a single SOP develops within each cluster. Using multiple lines of investigation, we provide evidence that members of the Bearded family of proteins (BFMs) inhibit Dl activation in non-SOP cells by binding to Neur and preventing it from interacting with Dl. We show that this activity of BFMs is dependent on the conserved NXXN motif, and report the unexpected finding that several BFMs include multiple functional copies of this motif. We find that a conserved NXXN motif in the intracellular domain of Dl is responsible for its interaction with Neur, indicating direct competition between Dl and BFMs for binding to Neur, and we show that Neur-dependent endocytosis of Dl requires the integrity of its NXXN motif. Our results illuminate the mechanism of an important regulatory event in Notch signaling that appears to be conserved between insects and crustaceans. (C) 2009 Elsevier Inc. All rights reserved.