Abstract

Members of the transforming growth factor-β (TGF-β) superfamily participate in numerous biological phenomena in multiple tissues, including in cell proliferation, differentiation, and migration. TGF-β superfamily proteins therefore have prominent roles in wound healing, fibrosis, bone formation, and carcinogenesis. However, the molecular mechanisms regulating these signaling pathways are not fully understood. Here, we describe the regulation of bone morphogenic protein (BMP) signaling by Bat3 (also known as Scythe or BAG6). Bat3 overexpression in murine cell lines suppresses the activity of the Id1 promoter normally induced by BMP signaling. Conversely, Bat3 inactivation enhances the induction of direct BMP target genes, such as Id1, Smad6, and Smad7. Consequently, Bat3 deficiency accelerates the differentiation of primary osteoblasts into bone, with a concomitant increase in the bone differentiation markers Runx2, Osterix, and alkaline phosphatase. Using biochemical and cell biological analyses, we show that Bat3 inactivation sustains the C-terminal phosphorylation and nuclear localization of Smad1, 5, and 8 (Smad1/5/8), thereby enhancing biological responses to BMP treatment. At the mechanistic level, we show that Bat3 interacts with the nuclear phosphatase small C-terminal domain phosphatase (SCP) 2, which terminates BMP signaling by dephosphorylating Smad1/5/8. Notably, Bat3 enhances SCP2–Smad1 interaction only when the BMP signaling pathway is activated. Our results demonstrate that Bat3 is an important regulator of BMP signaling that functions by modulating SCP2–Smad interaction.