FoxH1 mediates a Grg4 and Smad2 dependent transcriptional switch in Nodal signaling during Xenopus mesoderm development.

In the vertebrate blastula and gastrula the Nodal pathway is essential for formation of the primary germ layers and the organizer. Nodal autoregulatory feedback potentiates signaling activity, but mechanisms limiting embryonic Nodal ligand transcription are poorly understood. Here we describe a transcriptional switch mechanism mediated by FoxH1, the principle effector of Nodal autoregulation. FoxH1 contains a conserved engrailed homology (EH1) motif that mediates direct binding of groucho-related gene 4 (Grg4), a Groucho family corepressor. Nodal-dependent gene expression is suppressed by FoxH1, but enhanced by a FoxH1 EH1 mutant, indicating that the EH1 motif is necessary for repression. Grg4 blocks Nodal-induced mesodermal gene expression and Nodal autoregulation, suggesting that Grg4 limits Nodal pathway activity. Conversely, blocking Grg4 function in the ectoderm results in ectopic expression of Nodal target genes. FoxH1 and Grg4 occupy the Xnr1 enhancer, and Grg4 occupancy is dependent on the FoxH1 EH1 motif. Grg4 occupancy at the Xnr1 enhancer significantly decreases with Nodal activation or Smad2 overexpression, while FoxH1 occupancy is unaffected. These results suggest that Nodal-activated Smad2 physically displaces Grg4 from FoxH1, an essential feature of the transcriptional switch mechanism. In support of this model, when FoxH1 is unable to bind Smad2, Grg4 occupancy is maintained at the Xnr1 enhancer, even in the presence of Nodal signaling. Our findings reveal that FoxH1 mediates both activation and repression of Nodal gene expression. We propose that this transcriptional switch is essential to delimit Nodal pathway activity in vertebrate germ layer formation.