Signals generated by the members of the Wnt family mediate a diverse array of biological responses. The Wnt pathways have repeatedly been implicated in tumorigenesis, in mouse mammary cancer and in human colon carcinomas. In addition to their oncogenic properties, Wnts have also been shown to be critical for normal embryonic development. The lack of Wnt (wg) in Drosophila affects segmentation and in mouse its absence perturbs development of the central nervous system. Some Wnt family members are also involved in determining cell polarity. Furthermore, ectopic expression of synthetic Xwnt8 (and Xwnt1), RNA in the ventral region of early cleavage stage Xenopus embryos changes the fate of mesodermal cells causing axis-duplication. Due to the diverse roles of Wnts in a variety of biological systems, it is clear that detailed characterization of Wnt signaling pathways is important 1) to understand the molecular mechanisms of Wnt-mediated transformation, and 2) to address the question of how and why members of Wnt family are capable of inducing such wide ranging biological responses across many different cellular contexts. The fact that signaling components of Wnt signaling cascade directly interact with a member of the TGF-beta superfamily signaling components may be important for the diverse roles of Wnt signaling molecules. We find that transcriptional activity of the twin (Xtwn) gene during Spemann's organizer formation is directly regulated by the physical interaction between beta- catenin and Lef1/TCF, downstream components of the Wnt signaling cascade, and Smad4, an essential mediator of signals initiated by members of TGF-beta growth factor superfamily. In this grant application we plan to focus on understanding the molecular mechanisms of organizer formation by closely examining the role of Xtwn-related homeobox gene regulation. Specifically the goals of this research are the following: 1) How is Xtwn- related gene expression regulated by Smad4, beta-catenin, and Lef1/Tcf.? 2) What are the roles of Xtwn-related genes? 3) What Xtwn-related homologs exist from other vertebrates and how is the initial mechanism of axis specification conserved among vertebrates?