Negative regulation of Smad2 by PIASy is required for proper Xenopus mesoderm formation

Mesoderm induction and patterning are primarily regulated by the concentration of locally expressed morphogens such as members of the TGF superfamily. Smad2 functions as a transcription factor to regulate expression of mesodermal genes downstream of such morphogens. We have identified Xenopus PIASy (XPIASy), a member of the PIAS family, by yeast two-hybrid screening using Xenopus Smad2 (XSmad2) as a bait. During mesoderm induction, XPIASy is expressed in the animal half of embryos with a ventral high-dorsal low gradient at the marginal zone. XPIASy expression is positively and negatively regulated by activities of the XSmad2 and Wnt pathways, respectively. Interestingly, inhibition of XPIASy by morpholinos induces elongation of animal caps with induction of mesoderm genes even in the absence of their morphogen-mediated activation. In addition, their introduction into the ventral marginal zone results in a secondary axis formation. Gain-of-function analysis revealed that XPIASy inhibits mesoderm induction by specific and direct downregulation of XSmad2 transcriptional activity. These observations indicate that XPIASy functions as an essential negative regulator of the XSmad2 pathway to ensure proper mesoderm induction at the appropriate time and in the appropriate region, and suggest that both the initial step of morphogen-mediated activation of the XSmad2 pathway and regulation of the final downstream transcription step have crucial roles in mesoderm induction and patterning.