Transforming growth factor β inhibits bone morphogenetic protein-induced transcription through novel phosphorylated smad1/5-smad3 complexes

In vivo cells receive simultaneous signals from multiple extracellular ligands and must integrate and interpret them to respond appropriately. Here we investigate the interplay between pathways downstream of two transforming growth factor β (TGF-β) superfamily members, bone morphogenetic protein (BMP) and TGF-β. We show that in multiple cell lines, TGF-β potently inhibits BMP-induced transcription at the level of both BMP-responsive reporter genes and endogenous BMP target genes. This inhibitory effect requires the TGF-β type I receptor ALK5 and is independent of new protein synthesis. Strikingly, we show that Smad3 is required for TGF-β's inhibitory effects, whereas Smad2 is not. We go on to demonstrate that TGF-β induces the formation of complexes comprising phosphorylated Smad1/5 and Smad3, which bind to BMP-responsive elements in vitro and in vivo and mediate TGF-β-induced transcriptional repression. Furthermore, loss of Smad3 confers on TGF-β the ability to induce transcription via BMP-responsive elements. Our results therefore suggest that not only is Smad3 important for mediating TGF-β's inhibitory effects on BMP signaling but it also plays a critical role in restricting the transcriptional output in response to TGF-β.