Proper organ patterning depends on a tight coordination between cell proliferation and differentiation. The patterning of Drosophila retina occurs both very fast and with high precision. This process is driven by the dynamic changes in signaling activity of the conserved Hedgehog (Hh) pathway, which coordinates cell fate determination, cell cycle and tissue morphogenesis. Here we show that during Drosophila retinogenesis, the retinal determination gene dachshund (dac) is not only a target of the Hh signaling pathway, but is also a modulator of its activity. Using developmental genetics techniques, we demonstrate that dac enhances Hh signaling by promoting the accumulation of the Gli transcription factor Cubitus interruptus (Ci) parallel to or downstream of fused . In the absence of dac , all Hh-mediated events associated to the morphogenetic furrow are delayed. One of the consequences is that, posterior to the furrow, dac- cells cannot activate a Roadkill-Cullin3 negative feedback loop that attenuates Hh signaling and which is necessary for retinal cells to continue normal differentiation. Therefore, dac is part of an essential positive feedback loop in the Hh pathway, guaranteeing the speed and the accuracy of Drosophila retinogenesis. Author Summary Molecules of the Hedgehog (Hh) family are involved in the control of many developmental processes in both vertebrates and invertebrates. One of these processes is the formation of the retina in the fruitfly Drosophila . Here, Hh orchestrates a differentiation wave that allows the fast and precise differentiation of the fly retina, by controlling cell cycle, fate and morphogenesis. In this work we identify the gene dachshund ( dac ) as necessary to potentiate Hh signaling. In its absence, all Hh-dependent processes are delayed and retinal differentiation is severely impaired. Using genetic analysis, we find that dac , a nuclear factor that can bind DNA, is required for the stabilization of the nuclear transducer of the Hh signal, the Gli transcription factor Ci. dac expression is activated by Hh signaling and therefore is a key element in a positive feedback loop within the Hh signaling pathway that ensures a fast and robust differentiation of the retina. The vertebrate dac homologues, the DACH1 and 2 genes, are also important developmental regulators and cancer genes and a potential link between DACH genes and the Hh pathway in vertebrates awaits investigation.
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