Calcineurin signaling regulates neural induction through antagonizing the BMP pathway

Development of the nervous system begins with neural induction, which is controlled by complex signaling networks functioning in concert with one another. Fine-tuning of the bone morphogenetic protein (BMP) pathway is essential for neural induction in the developing embryo. However, the molecular mechanisms by which cells integrate the signaling pathways that contribute to neural induction have remained unclear. We find that neural induction is dependent on the Ca(2+)-activated phosphatase calcineurin (CaN). Fibroblast growth factor (FGF)-regulated Ca(2+) entry activates CaN, which directly and specifically dephosphorylates BMP-regulated Smad1/5 proteins. Genetic and biochemical analyses revealed that CaN adjusts the strength and transcriptional output of BMP signaling and that a reduction of CaN activity leads to an increase of Smad1/5-regulated transcription. As a result, FGF-activated CaN signaling opposes BMP signaling during gastrulation, thereby promoting neural induction and the development of anterior structures.