Arkadia enhances Nodal/TGF-beta signaling by coupling phospho-Smad2/3 activity and turnover.

Regulation of transforming growth factor-beta (TGF-beta) signaling is critical in vertebrate development, as several members of the TGF-beta family have been shown to act as morphogens, controlling a variety of cell fate decisions depending on concentration. Little is known about the role of intracellular regulation of the TGF-beta pathway in development. E3 ubiquitin ligases target specific protein substrates for proteasome-mediated degradation, and several are implicated in signaling. We have shown that Arkadia, a nuclear RING-domain E3 ubiquitin ligase, is essential for a subset of Nodal functions in the embryo, but the molecular mechanism of its action in embryonic cells had not been addressed. Here, we find that Arkadia facilitates Nodal signaling broadly in the embryo, and that it is indispensable for cell fates that depend on maximum signaling. Loss of Arkadia in embryonic cells causes nuclear accumulation of phospho-Smad2/3 (P-Smad2/3), the effectors of Nodal signaling; however, these must be repressed or hypoactive as the expression of their direct target genes is reduced or lost. Molecular and functional analysis shows that Arkadia interacts with and ubiquitinates P-Smad2/3 causing their degradation, and that this is via the same domains required for enhancing their activity. Consistent with this dual function, introduction of Arkadia in homozygous null (-/-) embryonic stem cells activates the accumulated and hypoactive P-Smad2/3 at the expense of their abundance. Arkadia-/- cells, like Smad2-/- cells, cannot form foregut and prechordal plate in chimeras, confirming this functional interaction in vivo. As Arkadia overexpression never represses, and in some cells enhances signaling, the degradation of P-Smad2/3 by Arkadia cannot occur prior to their activation in the nucleus. Therefore, Arkadia provides a mechanism for signaling termination at the end of the cascade by coupling degradation of P-Smad2/3 with the activation of target gene transcription. This mechanism can account for achieving efficient and maximum Nodal signaling during embryogenesis and for rapid resetting of target gene promoters allowing cells to respond to dynamic changes in extracellular signals.