Regulation of Dpp activity by tissue-specific cleavage of an upstream site within the prodomain

BMP4 is synthesized as an inactive precursor that is cleaved at two sites during maturation: initially at a site (S1) adjacent to the ligand domain, and then at an upstream site (S2) within the prodomain. Cleavage at the second site regulates the stability of mature BMP4 and this in turn influences its signaling intensity and range of action. The Drosophila ortholog of BMP4, Dpp, functions as a long- or short-range signaling molecule in the wing disc or embryonic midgut, respectively but mechanisms that differentially regulate its bioactivity in these tissues have not been explored. In the current studies we demonstrate, by dpp mutant rescue, that cleavage at the S2 site of proDpp is required for development of the wing and leg imaginal discs, whereas cleavage at the S1 site is sufficient to rescue Dpp function in the midgut. Both the S1 and S2 sites of proDpp are cleaved in the wing disc, and S2-cleavage is essential to generate sufficient ligand to exceed the threshold for pMAD activation at both short- and long-range in most cells. By contrast, proDpp is cleaved at the S1 site alone in the embryonic mesoderm and this generates sufficient ligand to activate physiological target genes in neighboring cells. These studies provide the first biochemical and genetic evidence that selective cleavage of the S2 site of proDPP provides a tissue-specific mechanism for regulating Dpp activity, and that differential cleavage can contribute to, but is not an absolute determinant of signaling range.