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CORL proteins (FUSSEL/SKOR proteins in humans) are related to Sno/Ski oncogenes but their developmental roles are unknown. We have cloned Drosophila CORL and show that its expression is restricted to distinct subsets of cells in the central nervous system. We generated a deletion of CORL and noted that homozygous individuals rarely survive to adulthood. Df(4)dCORL adult escapers display mushroom body (MB) defects and Df(4)dCORL larvae are lacking Ecdysone Receptor (EcR-B1) expression in MB neurons. This is phenocopied in CORL-RNAi and Smad2-RNAi clones in wild-type larvae. Furthermore, constitutively active Baboon (type I receptor upstream of Smad2) cannot stimulate EcR-B1 MB expression in Df(4)dCORL larvae, which demonstrates a formal requirement for CORL in Smad2 signaling. Studies of mouse Corl1 (Skor1) revealed that it binds specifically to Smad3. Overall, the data suggest that CORL facilitates Smad2 activity upstream of EcR-B1 in the MB. The conservation of neural expression and strong sequence homology of all CORL proteins suggests that this is a new family of Smad co-factors.

The ability of secreted Transforming Growth Factor β (TGFβ) proteins to act as morphogens dictates that their influence be strictly regulated. Here, we report that maternally contributed fat facets (faf; a homolog of USP9X/FAM) is essential for proper interpretation of the zygotic Decapentaplegic (Dpp) morphogen gradient that patterns the embryonic dorsal-ventral axis. The data suggest that the loss of faf reduces the activity of Medea (a homolog of Smad4) below the minimum necessary for adequate Dpp signaling and that this is likely due to excessive ubiquitylation on a specific lysine. This study supports the hypothesis that the control of cellular responsiveness to TGFβ signals at the level of Smad4 ubiquitylation is a conserved mechanism required for proper implementation of a morphogen gradient.