Bone morphogenetic proteins such as BMP4 are essential for proper development of telencephalic forebrain structures and induce differentiation of telencephalic neural stem cells into a variety of cellular fates, including astrocytic, neuronal, and mesenchymal cells. Little is yet understood regarding the mechanisms that underlie the spatiotemporal differences in progenitor response to BMP4. In a screen designed to identify novel targets of BMP4 signaling in telencephalic neural stem cells, we

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... und the mRNA levels of the previously uncharacterized factor CXXC5 reproducibly up-regulated upon BMP4 stimulation. In vivo, CXXC5 expression overlapped with BMP4 adjacent to Wnt3a expression in the dorsal regions of the telencephalon, including the developing choroid plexus. CXXC5 showed partial homology with Idax, a related protein previously shown to interact with the Wnt-signaling intermediate Dishevelled (Dvl). Indeed CXXC5 and Dvl co-localized in the cytoplasm and interacted in co-immunoprecipitation experiments. Moreover, fluorescence resonance energy transfer (FRET) experiments verified that CXXC5 and Dvl2 were located in close spatial proximity in neural stem cells. Studies of the functional role of CXXC5 revealed that overexpression of CXXC5 or exposure to BMP4 repressed the levels of the canonical Wnt signaling target Axin2, and CXXC5 attenuated Wnt3a-mediated increase in TOPflash reporter activity. Accordingly, RNA interference of CXXC5 attenuated the BMP4-mediated decrease in Axin2 levels and facilitated the response to Wnt3a in neural stem cells. We propose that CXXC5 is acting as a BMP4 -induced inhibitor of Wnt signaling in neural stem cells.