The long-term goal of this project is to elucidate molecular mechanisms that regulate cell-cell communication during development. We are interested in two related key questions in cellular communication: 1) how are tissues patterned and correctly connected by long-range signals, and 2) how are cells structures and functions coordinated at short-range with those of their neighbors. We study these processes by focusing on early developmental patterning, and on development of a specialized cell-cell interaction zone, the neuromuscular junction (NMJ). Bone morphogenetic proteins (BMPs) function at both long-range and at short-range to accomplish diverse patterning control. We have previously revealed how evolutionary changes in proteolytic control of BMP binding proteins affect the function of multi-molecular BMP shuttles critical for the formation and function of morphogen gradients. These processes impact the early stages of embryogenesis across the animal kingdom. BMPs are also utilized to modulate growth, development and homeostasis at the Drosophila NMJ, a glutamatergic synapse similar in structure and function to vertebrate central excitatory synapses. In flies each NMJ is unique and identifiable, synapses are large and accessible for electrophysiological and optical analysis, making the Drosophila NMJ a favorite genetic system to study synapse development. At the Drosophila NMJ, Glass bottom boat (Gbb), a BMP-type ligand secreted by both muscle and motor neuron, provides a signal that controls synaptic growth and neurotransmitter release. BMP signals via (i) canonical pathway, which activates transcriptional programs with distinct roles in the structural and functional development of the NMJ in response to accumulation of phosphorylated Smad (pMad) in motor neuron nuclei; and (ii) noncanonical, Mad-independent pathway, which connects synaptic structures to microtubules to regulate synapse stability. Intriguingly, pMad also accumulates at synaptic locations but the biological relevance of this phenomenon remained a mystery for over a decade. We discovered that pMad signals are selectively lost at NMJ synapses with reduced postsynaptic glutamate receptors. Specifically, loss of a particular receptor subtype (type-A glutamate receptors) induced complete loss of synaptic pMad signals. In contrast, nuclear pMad persisted in motor neuron nuclei, and expression of BMP target genes was unaffected, indicating a specific impairment in the pMad production/ maintenance at synaptic terminals. Furthermore, synaptic pMad accumulation followed the activity (quantal size) and not the net levels of postsynaptic type-A receptors. Synaptic pMad appears to function as a local sensor for NMJ synapse activity and has the potential to coordinate synapse activity status with an instructive BMP retrograde signal required for synapse growth, stability and homeostasis. The molecular mechanisms underlying the ability of synaptic pMad to function as an acute sensor for postsynaptic activity are currently investigated.