Costal 2 interactions with Cubitus interruptus (Ci) underlying Hedgehog-regulated Ci processing

Extracellular Hedgehog (Hh) proteins alter cellular behaviours from flies to man by regulating the activities of Gli/Ci family transcription factors. A major component of this response in Drosophila is the inhibition of proteolytic processing of the latent transcriptional activator Ci-155 to a shorter Ci-75 repressor form. Processing is thought to rely on binding of the kinesin-family protein Cos2 directly to Ci-155 domains known as CDN and CORD, allowing Cos2-associated protein kinases to phosphorylate Ci-155 efficiently and create a binding site for an E3 ubiquitin ligase complex. Here we show that the last three zinc fingers of Ci-155 also bind Cos2 in vitro and that the zinc finger region, rather than the CDN domain, functions redundantly with the CORD domain to promote Hh-regulated Ci-155 proteolysis in wing discs. We also find evidence for a unique function of Cos2 binding to CORD. Cos2 binding to CORD, but not to other regions of Ci, is potentiated by nucleotides and abrogated by the nucleotide binding variant Cos2 S182N. Removal of the CORD region alone enhances processing under a variety of conditions. Most strikingly, CORD region deletion allows Cos2 S182N to stimulate efficient Ci processing. We deduce that the CORD region has a second function distinct from Cos2 binding that inhibits Ci processing, and that Cos2 binding to CORD relieves this inhibition. We suggest that this regulatory activity of Cos2 depends on a specific nucleotide-bound conformation that may be regulated by Hh.