The transcription factor Schnurri plays a dual role in mediating Dpp signaling during embryogenesis

Decapentaplegic (Dpp), a homolog of vertebrate bone morphogenic protein 2/4 , is crucial for embryonic patterning and cell fate specification in Drosop hila, Dpp signaling triggers nuclear accumulation of the Smads Mad and Mede a, which affect gene expression through two distinct mechanisms: direct act ivation of target genes and relief of repression by the nuclear protein Bri nker (Brk). The zinc-finger transcription factor Schnurri (Shn) has been im plicated as a co-factor for Mad, based on its DNA-binding ability acid evid ence of signaling dependent interactions between the two proteins. A key qu estion is whether Shn contributes to both repression of brk as well as to a ctivation of target genes. We find that during embryogenesis, brk expressio n is derepressed in shn mutants. However, while Mad is essential for Dpp-me diated repression of brk, the requirement for shn is stage specific. Analys is of brk; shn double mutants reveals that upregulation of brk does not acc ount for all aspects of the shn mutant phenotype, Several Dpp target genes are expressed at intermediate levels in double mutant embryos, demonstratin g that shn also provides a brk-independent positive input to gene activatio n. We find that Shn-mediated relief of brk repression establishes broad dom ains of gene activation, while the brk-independent input from Shn is crucia l for defining the precise limits and levels of Dpp target gene expression in the embryo.