Drosophila MAD binds to DNA and directly mediates activation of vestigial by decapentaplegic

The TGF-beta (transforming growth factor-beta)-related signalling proteins, including Decapentaplegic (Dpp) in Drosophila and bone morphogenic proteins and activin in vertebrates, affect the growth and patterning of a great variety of structures. However, the mechanisms by which these ligands regulate gene expression are not understood. Activation of complexes of type I with type II receptors results in the phosphorylation and nuclear localization of members of the SMAD protein family(1-9), which are thought to act as co-activators of transcription, perhaps in conjunction with sequence-specific cofactors(10). Here we show that the aminoterminal domain of the Drosophila Mothers against dpp protein (Mad), a mediator of Dpp signalling(11-14), possesses a sequence-specific DNA-binding activity that becomes apparent when carboxy-terminal residues are removed. Mad binds to and is required for the activation of an enhancer within the vestigial wing-patterning gene in cells across the entire developing wing blade. Mad also binds to Dpp-response elements in other genes. These results suggest that Dpp signalling regulates gene expression by activating Mad binding to target gene enhancers.