Smad3 inhibits transforming growth factor-beta and activin signaling by competing with Smad4 for FAST-2 binding

Transcriptional regulation by transforming growth factor-beta and activin is mediated by interaction of Smad2 and Smad3 with specific transcription factors and/or DNA elements. However, Smad3 behaves differently from Smad2 in regulating transcription by a winged-helix transcription factor, FAST-2, on an activin-responsive element (ARE) in the Xenopus Mix.2 promoter. Smad3 alone was able to stimulate the ARE through FAST-2, but inhibited the ARE transactivation mediated by Smad2/Smad4 following receptor activation. We characterized the functional domains that are involved in these two activities of Smad3. Deletion of the MH1 domain as well as mutations of four lysine residues in the MH1 domain abrogated the inhibitory activity of Smad3, but did not compromise the self-stimulatory function. In contrast, deletion of the MH2 domain or a point mutation of glycine 379 within this domain obliterated the self-stimulatory activity of Smad3, but not the inhibitory activity. In an electrophoretic mobility shift assay, we found that Smad3 was able to associate with the FAST-2.ARE complex and that this association was dependent on FAST-2. In addition, Smad3 was not able to directly bind the ARE in a DNase I protection assay, in which FAST-2 binds the ARE around a motif (TGTGTATT) previously characterized to associate with the human FAST-1 protein. Interestingly, Smad4 was also able to directly associate with the FAST-2.ARE complex through binding with FAST-2. In a gel shift assay, the association of FAST-2 with Smad4 was mutually exclusive from the association with Smad3. Taken together, these data indicate that Smad3 exerts the inhibitory activity by competitive association with FAST-2.