Enzymatic regulation of pattern: BMP4 binds CUB domains of Tolloids and inhibits proteinase activity

In Xenopus embryos, a dorsal-ventral patterning gradient is generated by diffusing Chordin/bone morphogenetic protein (BMP) complexes cleaved by BMP1/Tolloid metalloproteinases in the ventral side. We developed a new BMP1/Tolloid assay using a fluorogenic Chordin peptide substrate and identified an unexpected negative feedback loop for BMP4, in which BMP4 inhibits Tolloid enzyme activity noncompetitively. BMP4 binds directly to the CUB (Complement 1r/s, Uegf [a sea urchin embryonic protein] and BMP1) domains of BMP1 and Drosophila Tolloid with high affinity. Binding to CUB domains inhibits BMP4 signaling. These findings provide a molecular explanation for a long-standing genetical puzzle in which antimorphic Drosophila tolloid mutant alleles displayed anti-BMP effects. The extensive Drosophila genetics available supports the relevance of the interaction described here at endogenous physiological levels. Many extracellular proteins contain CUB domains; the binding of CUB domains to BMP4 suggests a possible general function in binding transforming growth factor-beta (TGF-beta) superfamily members. Mathematical modeling indicates that feedback inhibition by BMP ligands acts on the ventral side, while on the dorsal side the main regulator of BMP1/Tolloid enzymatic activity is the binding to its substrate, Chordin.