HSPG modification by the secreted enzyme Notum shapes the Wingless morphogen gradient

The secreted signaling protein Wingless acts as a morphogen to pattern the imaginal discs of Drosophila. Here we report identification of a secreted repressor of Wingless activity, which we call Notum. Loss of Notum function leads to increased Wingless activity by altering the shape of the Wingless protein gradient. When overexpressed, Notum blocks Wingless activity. Notum encodes a member of the alpha/beta-hydrolase superfamily, with similarity to pectin acetylesterases. We present evidence that Notum influences Wingless protein distribution by modifying the heparan sulfate proteoglycans Dally-like and Dally. High levels of Wingless signaling induce Notum expression. Thus, Wingless contributes to shaping its own gradient by regulating expression of a protein that modifies its interaction with cell surface proteoglycans.