The amino terminus of Smads permits transcriptional specificity

Smad proteins transduce transforming growth factor-beta signals from the cell surface to the nucleus, regulating a variety of physiologic processes. In the nucleus, Smads control gene expression by binding to both DNA and transcription factors. Individual Smads regulate distinct subsets of target genes. The key residues important for this specificity are thought to reside in the carboxyl-terminal MH2 domain. To further examine Smad specificity in vivo, we undertook structure-function studies in Xenopus laevis embryos and found that truncated Smads containing the MH2 domain activate gene transcription. A striking finding revealed by the in vivo analyses was that the functional truncated Smads all behaved identically and had lost wild-type specificity. For most Smads, wild-type activity required the presence of an MH1 domain, either in cis or in trans. Of note, even heterologous MH1 domains could restore wild-type signaling specificity to effector MH2 domains. We found a possible mechanism to account for these observations, as Smad MH1 domains altered the binding of pathway-specific transcription factors to the MH2 domain. Thus, Smad MH1 domains are important to the regulation of transcriptional specificity.