The matricellular protein SMOC (Secreted Modular Calcium binding protein) is conserved phylogenetically from vertebrates to arthropods. We showed previously that SMOC inhibits bone morphogenetic protein (BMP) signaling downstream of its receptor via activation of mitogen-activated protein kinase (MAPK) signaling. In contrast, the most prominent effect of the Drosophila orthologue, pentagone (pent), is expanding the range of BMP signaling during wing patterning. Using SMOC deletion constructs we found that SMOC-∆EC, lacking the extracellular calcium binding (EC) domain, inhibited BMP2 signaling, whereas SMOC-EC (EC domain only) enhanced BMP2 signaling. The SMOC-EC domain bound HSPGs with a similar affinity to BMP2 and could expand the range of BMP signaling in an in vitro assay by competition for HSPG-binding. Together with data from studies in vivo we propose a model to explain how these two activities contribute to the function of Pent in Drosophila wing development and SMOC in mammalian joint formation. DOI: http://dx.doi.org/10.7554/eLife.17935.001
eLife digest During the development of an embryo, a group of proteins known as growth factors stimulate cells to divide and direct how organs and limbs form. One family of growth factors called bone morphogenetic proteins (BMPs) regulate the formation of bone and many other tissues in the embryo. BMPs are released from cells, diffuse away and are then detected by other cells. When BMPs attach to docking station-like structures on the cell surface, called receptors, they stimulate a signaling process inside the cell. In 2009, researchers found that a protein called SMOC blocks BMP activity in animals with backbones by triggering an interfering signal inside the cell. In flies, however, the equivalent protein can make BMP diffuse further from the cell that releases it. To find out how SMOC can do both of these things, Thomas et al. – including some of the researchers involved in the 2009 study – conducted experiments to see which parts of SMOC are required to either block BMP signaling or encourage the diffusion of BMP. These experiments revealed that one end of SMOC can stick to molecules on the cell surface that are not receptors but are molecules where BMP can also bind. When this end of SMOC attaches to these sites, BMPs cannot bind and so diffuse further away. Thomas et al. then produced complete or shortened versions of SMOC proteins to see how this affected BMP activity in frogs. These experiments indicated that the opposite end of SMOC is required for short-circuiting the BMP signal. The results also showed that, at lower concentrations, SMOC stimulates BMPs to diffuse, and that higher concentrations are required to block BMP signaling. These findings suggest that similar to flies, SMOC can also stimulate BMPs to diffuse from the cell in animals with backbones. The next step will be to identify the cell surface receptor for SMOC to better understand the molecular mechanisms that inhibit BMP. The SMOC pathway could be targeted for therapeutic strategies to combat diseases associated with errors in BMP signaling like osteoarthritis, or in cell-based therapies where BMP signaling must be inhibited to produce cells needed to repair damaged tissues. DOI: http://dx.doi.org/10.7554/eLife.17935.002