Homologues of Twisted gastrulation are extracellular cofactors in antagonism of BMP signalling

Twisted gastrulation (TSG) is involved in specifying the dorsal-most cell fate in Drosophila embryos, but its mechanism of action is poorly understood. TSG has been proposed to modify the action of Short gastrulation (SOG), thereby increasing signalling by the bone morphogenetic protein (BMP) Decapentaplegic. SOG, an inhibitor of BMP signalling, is in turn inactivated by the protease Tolloid. Here we identify Tsg gene products from human, mouse, Xenopus, zebrafish and chick. Expression patterns in mouse and Xenopus embryos are consistent with in vivo interactions between Tsg, BMPs and the vertebrate SOG orthologue, chordin. We show that Tsg binds both the vertebrate Decapentaplegic orthologue BMP4 and chordin, and that these interactions have multiple effects. Tsg increases chordin's binding of BMP4, potentiates chordin's ability to induce secondary axes in Xenopus embryos, and enhances chordin cleavage by vertebrate tolloid-related proteases at a site poorly used in Tsg's absence; also, the presence of Tsg enhances the secondary axis-inducing activity of two products of chordin cleavage. We conclude that Tsg acts as a cofactor in chordin's antagonism of BMP signalling.