Project Summary/Abstract The morphogen gradient theory has been a useful framework in guiding studies aimed at understanding cell identity is generated across a developing tissue. Studies investigating the role of BMP signaling in the specification of different cell fates across the developing Drosophila wing imaginal disc have proven that this system is an ideal one to study the molecular mechanisms governing morphogen gradient establishment, maintenance and interpretation. Our previous research uncovered three important features of this gradient system, first, we found that two morphogens, Dpp and Gbb, contribute in distinctly different ways to the BMP activity gradient;second, Sax, one of two receptors mediating morphogen signals has a dual function of both blocking and promoting signaling; and third, a transcriptional feedback mechanism buffers the signaling gradient against stochastic or environmental fluctuations. In this renewal application, we propose a research program to extend our findings with regard to the different behaviors of the BMP signaling molecules, Gbb and Dpp and the novel behavior of the Sax receptor. BMPs have profound functions in development and homeostasis, from early embryonic axis specification to the induction of bone growth. Mutations in various components of the BMP signaling pathway are responsible for multiple diseases and syndromes, including juvenile polyposis, brachydactyly, FOP, HHT2, Loeys-Dietz syndrome and pancreatic carcinomas. Clearly, misregulation of the BMP signaling pathway has serious ramifications on human health and development, and given their potent effects on cell physiology, BMP ligands have long been a desired therapeutic agent. However, to ensure success as therapeutics or in disease intervention, the action of these powerful molecules must be understood in the context of the whole organism. The BMP pathway is highly conserved throughout the animal kingdom, at both the molecular and functional level. This allows us to make use of the Drosophila model system to more quickly investigate not only the factors but also the mechanisms responsible for regulating BMP signaling activity. We have the advantage of examining the interplay between different signaling components at their endogenous concentrations, in their normal location, not possible in most other experimental systems. We have been able to identify new components and novel biochemical behaviors that impact BMP function and intend to investigate the mechanistic underpinnings of these new findings. Our results can easily be extrapolated into the human system and will provide valuable insight into not only our understanding of BMP signaling but also into the intricacies of morphogen gradients as a fundamental mechanism by which different cells acquire their identity.