HEDGEHOG PATTERNING ACTIVITY - ROLE OF A LIPOPHILIC MODIFICATION MEDIATED BY THE CARBOXY-TERMINAL AUTOPROCESSING DOMAIN

Autocatalytic processing mediated by the carboxyterminal domain of the hedgehog (hh) protein precursor (Hh) generates an amino-terminal prod uct that accounts for all known signaling activity. The role of autopr ocessing in biogenesis of the hh signal has been unclear, since a trun cated unprocessed protein lacking all carboxy-terminal domain sequence s retains signaling activity. Here, we present evidence that the autop rocessing reaction proceeds via an internal thioester intermediate and results in a covalent modification that increases the hydrophobic cha racter of the signaling domain and influences its spatial and subcellu lar distribution. We demonstrate that truncated unprocessed amino-term inal protein causes embryonic mispatterning, even when expression is l ocalized to cells that normally express Hh, thus suggesting a role for autoprocessing in spatial regulation of hh signaling. This type of pr ocessing also appears to operate in the biogenesis of other novel secr eted proteins.