npg Fused dimerization transduces Hedgehog signal 1448 in the absence of Hh. Taken together with data from FRET, these findings suggest that the Cos2/Fu complex interacts with Smo at different regions in the presence or absence of a Hh signal. In the presence of Hh, Cos2 me- diates the interaction between the Cos2/Fu complex and Smo by binding to the region of Smo from amino acids 818 to 974; in the absence of Hh, the C-terminal part of Smo (aa 974-1 035) interacts with Fu. Recent studies have suggested that Fu kinase activity also plays a very important role in germline stem cell fate control by generating a gradient BMP response [42]. Given that previous studies demonstrated that the Hh pathway is not required in germline cells, and the loss-of- function of Fu leads to early germ cell proliferation [43], the mechanism of Fu activation in the germline might be different and Hh independent. Our data indicate that Fu forms a dimer in response to Hh through Cos2/Smo interactions; the formation of a Fu dimer is Smo- and Cos2-dependent and is regulated by both graded Hh and the graded phosphorylation of the Smo C-tail. In a previ- ous study, it was suggested that membrane tethering can activate Fu [44]. We also tested whether the membrane- tethered form Fu forms a dimer by FRET and whether our Div-Fu associates with the plasma membrane. The results suggested that the membrane-tethered form Fu used by Claret et al. might form a dimer and our Div- Fu did not associate with the plasma membrane in the absence of Hh (data not shown). This implies that in the presence of Hh, the Fu membrane association induced by Smo and Cos2 might increase the possibility of dimeriza- tion. As a Hh pathway specific Ser/Thr kinase, how does Fu act in the Hh pathway? We found that dimerized Fu is auto-phosphorylated and can phosphorylate both Cos2 and Su(fu). With changes in the Hh gradient, Cos2 is phosphorylated under low Hh concentrations, however, only upon a high Hh concentration could Su(fu) be phosphorylated. FKBP- or Div-based Fu dimers could induce the phosphorylation of Cos2 and Su(fu). This suggests that Cos2 and Su(fu) are direct phosphorylation substrates of activated Fu. We observed that AP20187, a chemical dimer inducer, induced a graded Fu dimeriza- tion and pathway activation, which suggests that the Hh gradient may be conveyed by graded Fu dimeriza- tion. In agreement with this conclusion, we found that the dimerized Fu kinase domain could activate the Hh pathway, partially bypassing Smo and Cos2, while the dimerized FuFL or Fu kinase domain with a Su(fu) bind- ing site (FuK*), could completely bypass the functional requirement of Cos2 and Smo to activate downstream gene expression. The different potency in pathway ac- tivation by FuK and FuK* is likely due to the Su(fu) binding region carried by FuK*, which can mediate the phosphorylation of Su(fu), leading to Ci155 release and its nuclear translocation. Our in vivo data indicate that a Div-based Fu dimer could turn on downstream gene dpp and ptc expression in the A-compartment. In the presence of low levels of Hh, which are mimicked by SmoSD1 and SmoSD12, the phosphorylation of Cos2 by dimerized Fu contributes to the dissociation of Ci155 from Cos2/Fu complex. As Su(fu) is not phosphorylated by dimerized Fu in the presence of a low concentration of Hh, Ci155 dissociates from Cos2 but not from Su(fu), leading to dpp expression. Under this condition, Fu forms a weak dimer compared with those at high Hh concentration. In the presence of a high Hh concentration, which is mim- icked by SmoSD, Fu forms a strong dimer and phospho- rylates Su(fu), which terminates the inhibition of Su(fu) on Ci155 and causes the dissociation of Ci155 from Cos2 and Su(fu). Released Ci155 translocates to the nucleus and activates the expression of the ptc gene. Taken together, our study suggests that, upon Hh bind- ing with the Ptc receptor, the Hh gradient is translated to a graded Smo phosphorylation, which induces Fu di- merization at different levels through the interaction be- tween Cos2/Fu complex and activated Smo. Fu dimeriza- tion conveys the Hh gradient by phosphorylating Cos2 and/or Su(fu), which results in the nuclear translocation of Ci155, leading to the differential activation of down- stream gene expression (Supplementary information, Figure S11). This research suggests roles for specific phosphorylation events of Fu, Cos2 and Su(fu) in Hh signaling transduction and also sheds light on how the phosphorylation of Hh pathway components regulates their activity, the dissociation of the Cos2/Fu complex and Ci155, and the subcellular location of Ci155 to result in different downstream gene expression patterns in re- sponse to Hh signaling. Furthermore, we have just begin to uncover how a morphogen gradient controls one cell type to generate diverse cell types in metazoan develop- ment. Materials and Methods Constructs, cell culture, transfection, immunoprecipitation, western blot analysis and small molecule treatment All constructs described in this study were made from Droso- phila genes and generated using the pUAST vector. Amino acid substitutions were generated using PCR-based mutagenesis. S2 cells were cultured in the Schneider’s Drosophila Medium (Invit- rogen) with 10% fetal bovine serum, 100 U/ml penicillin and 100 µg/ml streptomycin as described. Hh conditional medium was obtained from Hh stable cell line of S2 cells after 24 h induction by 0.7 mM CuSO4, and was added to cells at 50% of the medium for 24 h stimulation before cells were harvested. Transfection was carried out using the Calcium Phosphate Transfection Kit (Specialty Media) according to the manufacturer’s instructions. Immunopre- Cell Research | Vol 21 No 10 | October 2011