Profilaggrin is a major structural protein expressed in the granular layer of the epidermis. It is a polyprotein precursor consisting 10, 11 or 12 filaggrin repeats which are adjoined by a short linker sequences. During terminal differentiation, this precursor is cleaved into individual filaggrin molecules, which based on in vitro experiments, are thought to be involved in the aggregation and specific alignment of the keratin intermediate filaments in the fully differentiated, dead, cornified cell layers of the epidermis. In earlier studies, we have explored the regulation of expression of the profilaggrin gene and have characterized its proximal promoter. An AP1 site and its cognate binding c-fos and c-jun proteins confer keratinocyte-specific expression to the gene, in concert with neighboring Sp1, ets-like, and NF-KB elements. We have discovered a novel ets transcription protein that seems to function in the regulation of expression of several late differentiation genes in the epidermis, including profilaggrin. We are now studying the role of a novel series of Oct transcription factors on the expression of the profilaggrin gene. Studies by Morasso and collaborators have identified a homeodomain transcription factor, known as Distal-less 3 (Dlx3), that plays a central role in activating the expression of structural proteins that are necessary for the formation of the cornified layer. During epidermal development, the expression of Dlx3 is restricted to the differentiated (suprabasal) cells, predominantly the granular cells, of the mouse stratified epidermis. Gain-of-function experiments by ectopically driving the expression of Dlx3 in the basal cells of transgenic mice using the basal-specific keratin 5 promoter, resulted in a severely abnormal epidermal phenotype leading to perinatal lethality because of the inability to form a functional cornified layer, that constitutes the water-barrier of the skin and prevents dehydration. Importantly, the basal cells in the transgenic epidermis ceased to proliferate and expressed late differentiation epidermal markers such as loricrin and filaggrin. In order to determine the signaling pathway by which Dlx3 is activated in the epidermis, we have studied mouse keratinocytes cultivated in vitro. Basal keratinocytes can be induced to differentiate in vitro by increasing the Ca++ concentration from 0.05 mM to 0.12 mM in the culture medium, in a situation that mimics the endogenous Ca++ gradient present in the skin. The Ca signaling differentiation pathway is associated with activation of protein kinase C (PKC). Recent data demonstrate a role of PKC signaling in the late stages of epidermal differentiation, showing that activation of PKC is necessary for expression of the late differentiation markers loricrin and profilaggrin. The Dlx3 promoter is also responsive to the Ca++ shift, suggesting that this region contains the regulatory elements required to respond to the Ca++ signaling pathway of differentiation. To determine the factors that induce Dlx3 gene expression, we have cloned the 1.2-kb proximal region of murine gene and analyzed its cis-regulatory elements and potential trans-acting factors. The proximal region of the Dlx3 gene has a canonical TATA box and CCAAT box, and the transcription start site was located 205 base pairs upstream from the initiation of translation site. Serial deletion analysis showed that the region between ?84 and ?34 confers the maximal promoter activity both in undifferentiated and differentiated primary mouse keratinocytes. Gel retardation assays and mutational analysis demonstrated that the transcriptional regulator NF-Y (also referred to as CBF) binds to a CCAAT box motif within this region and is responsible for the majority of the Dlx3 promoter activity. In addition, an Sp1 binding site was located immediately upstream of transcription start site that acts as a positive regulatory element of the Dlx3 promoter, independent of the CCAAT box motif. Importantly, elements residing between +30 to +60 of the Dlx3 gene are responsible for the Ca++-dependent induction of Dlx3 during keratinocyte differentiation. These in vitro assays should help elucidate the cascade of events that begin with the Ca signal and culminate with the activation of specific structural epidermal genes in events that are linked with the keratinocyte differentiation process. Dlx3 acts as a transcriptional activator during development and differentiation. Transcription factor function requires nuclear localization. The intracellular localization of the green fluorescent protein (GFP) fused to Dlx3 was examined in keratinocytes induced to differentiate by calcium (Ca++). In both basal and differentiated keratinocytes, GFP-Dlx3 localized to the nucleus. A bipartite nuclear localization signal (NLS) was identified at the amino terminus of the homeodomain. The insertion of the Dlx3 bipartite NLS sequence, localized the cytoplasmic fusion protein, GFP-keratin 14 (K14), to the nucleus. This is one of the first bipartite NLS identified in a vertebrate homeodomain protein shown to be necessary and sufficient for nuclear localization. Dlx3 NLS sequences were found to be critical not only for nuclear localization, but also were essential for Dlx3 transactivation potential, specific DNA binding, and interaction with Msx1 protein. In a parallel approach to understand the functional role of Dlx3, a targeted deletion of the gene was performed and the analysis of the phenotype has been submitted for publication. Targeted deletion of Dlx3 results in embryonic developmental arrest around day 9.5-10, associated with a gross failure of the placenta to undergo proper morphogenesis. It was not possible to assess the effects of Dlx3 loss of function on epidermal differentiation, since embryonic death occurs significantly earlier than the onset of epidermal stratification (E15.5). Of the large number of targeted mutagenesis of genes that lead to early death in embryogenesis, several of those due to defects in placenta development have been rescued by tetraploid aggregation experiments (i.e. Mash-2, Ets-2). Rescue of the trophoblast defect in the Dlx3 -/- embryos by tetraploid aggregation experiments has been performed, and extended the survival of the null embryos only to day 13.5 of development. These results have led us to commence a project for conditional targeting of Dlx3 to be able to specifically assess the role of this homeodomain transcription factor in epidermal stratification.