Establishment of dorsal-ventral (DV) polarity in the Drosophila embryo has its origins in the egg chamber within which the oocyte develops. The dorsally-located oocyte nucleus regulates the polarity of the overlying follicular epithelium via an inductive interaction involving the Drosophila homologues of TGFalpha and the EGF receptor. DV polarity is then transmitted from the follicular epithelium to the developing embryo via a signal mediated by the products of the genes nudel, windbeutel and pipe. These genes regulate a serine proteolytic cascade that ultimately produces a ligand for the Toll receptor in the embryonic membrane. We have recently cloned the pipe gene, which exhibits a ventrally-restricted expression pattern that is altered in the background of maternal-effect mutants that affect egg chamber DV polarity. The pipe locus encodes two isoforms of a protein with amino acid sequence similarity to the previously identified heparan sulfate 2-O-sulfotransferase (HSST) from Chinese Hamster Ovary cells, an enzyme shown to be involved in glycosaminoglycan (GAG) modification. The overall aims of this proposal are to confirm that Pipe functions as an HSST and investigate how spatially-restricted activity of this protein is involved in the localized activation of the Toll receptor by its ligand. To determine which of the HSST isoforms fulfills the ovarian function of pipe, cDNAs encoding the different isoforms will be expressed in the ovary under inducible transcriptional control and their ability to define ventral cell fate assessed. Nucleotide sequence alterations in mutant alleles of the pipe gene will be identified to provide information about functionally important parts of the protein. Antibodies will be raised against the protein product to determine its subcellular localization in the egg chamber. A series of experimental approaches will be used to confirm the role of GAGs in the establishment of dorsal-ventral polarity, to determine which GAG side chain is/are likely to be the targets of Pipe and to determine whether the Nudel protein carries the GAG side chain(s) modified by Pipe. The Drosophila dorsal-ventral pathway is a model for a variety of medically-relevant vertebrate processes involving localized serine proteolytic activation or receptor/ligand interactions. A role for sulfated GAGs has been demonstrated for both of these processes in humans. Thus, the identification of Pipe as an HSST confirms and enhances the value of this pathway to serve as a model for studying human disease.