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Mammalian forms of the transcription repressor, Kaiso, can reportedly bind methylated DNA and non-methylated CTGCNA motifs. Here we compare the DNA-binding properties of Kaiso from frog, fish and chicken and demonstrate that only the methyl-CpG-binding function of Kaiso is evolutionarily conserved. We present several independent experimental lines of evidence that the phenotypic abnormalities associated with xKaiso-depleted Xenopus laevis embryos are independent of the putative CTGCNA-dependent DNA-binding function of xKaiso. Our analysis suggests that xKaiso does not play a role in the regulation of either xWnt11 or Siamois, key signalling molecules in the Wnt pathway during X. laevis gastrulation. The major phenotypic defects associated with xKaiso depletion are premature transcription activation before the mid-blastula transition and concomitant activation of a p53-dependent cell-death pathway.

We demonstrate that a direct interaction between the methyl-CpG-dependent transcription repressor Kaiso and xTcf3, a transducer of the Wnt signalling pathway, results in their mutual disengagement from their respective DNA-binding sites. Thus, the transcription functions of xTcf3 can be inhibited by overexpression of Kaiso in cell lines and Xenopus embryos. The interaction of Kaiso with xTcf3 is highly conserved and is dependent on its zinc-finger domains (ZF1-3) and the corresponding HMG DNA-binding domain of TCF3/4 factors. Our data rule out a model suggesting that xKaiso is a direct repressor of Wnt signalling target genes in early Xenopus development via binding to promoter-proximal CTGCNA sequences as part of a xTcf3 repressor complex. Instead, we propose that mutual inhibition by Kaiso/TCF3 of their DNA-binding functions may be important in developmental or cancer contexts and acts as a regulatory node that integrates epigenetic and Wnt signalling pathways.

DNA methylation in animals is thought to repress transcription via methyl-CpG specific binding proteins, which recruit enzymatic machinery promoting the formation of inactive chromatin at targeted loci. Loss of DNA methylation can result in the activation of normally silent genes during mouse and amphibian development. Paradoxically, global changes in gene expression have not been observed in mice that are null for the methyl-CpG specific repressors MeCP2, MBD1 or MBD2. Here, we demonstrate that xKaiso, a novel methyl-CpG specific repressor protein, is required to maintain transcription silencing during early Xenopus laevis development. In the absence of xKaiso function, premature zygotic gene expression occurs before the mid-blastula transition (MBT). Subsequent phenotypes (developmental arrest and apoptosis) strongly resemble those observed for hypomethylated embryos. Injection of wild-type human kaiso mRNA can rescue the phenotype and associated gene expression changes of xKaiso-depleted embryos. Our results, including gene expression profiling, are consistent with an essential role for xKaiso as a global repressor of methylated genes during early vertebrate development.