Lateral inhibition in proneural clusters: cis-regulatory logic and default repression by Suppressor of Hairless

Lateral inhibition, wherein a single cell signals to its neighbors to prevent them from adopting its own fate, is the best-known setting for cell-cell communication via the Notch (N) pathway. During peripheral neurogenesis in Drosophila, sensory organ precursor (SOP) cells arise within proneural clusters (PNCs), small groups of cells endowed with SOP fate potential by their expression of proneural transcriptional activators. SOPs use N signaling to activate in neighboring PNC cells the expression of multiple genes that inhibit the SOP fate. These genes respond transcriptionally to direct regulation by both the proneural proteins and the N pathway transcription factor Suppressor of Hairless [Su(H)], and their activation is generally highly asymmetric; i.e. only in the inhibited (non-SOP) cells of the PNC, and not in SOPs. We show that the substantially higher proneural protein levels in the SOP put this cell at risk of inappropriately activating the SOP-inhibitory genes, even without input from N-activated Su(H). We demonstrate that this is prevented by direct 'default' repression of these genes by Su(H), acting through the same binding sites it uses for activation in non-SOPs. We show that de-repression of even a single N pathway target gene in the SOP can extinguish the SOP cell fate. Finally, we define crucial roles for the adaptor protein Hairless and the co-repressors Groucho and CtBP in conferring repressive activity on Su(H) in the SOP. Our work elucidates the regulatory logic by which N signaling and the proneural proteins cooperate to create the neural precursor/epidermal cell fate distinction during lateral inhibition.