The development of a functional mammalian nervous system requires the formation of a diverse array of neuronal cell types. These arise during embryonic life from specific pools of mitotically-active neural progenitors. How distinct neural progenitor populations are established at the outset of neural development is a central question for understanding the organizational principles underpinning a functional nervous system. Further, a detailed knowledge of critical regulatory mechanisms will facilitate rational regenerative strategies for treatment of neurodegenerative diseases, and enable the effective use of patient-specific iPS cells to model disease states and screen for drugs that may treat a specific disease. Sonic hedgehog (Shh) signaling specifies mammalian neural progenitors throughout most of the ventral central nervous system including dopaminergic and motor neuron progenitors, targets of Parkinson's and Lou Gehrig's disease. Shh is a morphogen; the concentration of signal and duration of signaling underlies the formation of spatially- and temporally-distinct classes of neural progenitors. In contrast, deregulated pathway activity results in cancers of the nervous system, and normal signaling supports cancers arising from several other organs including the pancreas, lung, and gut. Our goal is to understand how a dynamic signaling response is transduced into distinct transcriptional regulatory programs in the specification of neural progenitor types. The transcriptional response is directed by the Gli-family of transcriptional regulators. We have used an in vitro model system to comprehensively identify cis-regulatory modules (CRM) mediating Gli- dependent regulation of mammalian neural target genes within the developing central nervous system. Specific Aim 1 will examine how the affinity of Gli-factors for their target sites determines the Sonic hedgehog response. Specific Aim 2 will investigate how the neural context, transcriptional status, and chromatin organization interplay in the initiation and progression of Shh-directed neural patterning. Our approach combines the strengths of an in vitro, embryo stem cell-based model of Shh action with in vivo studies utilizing genetically-modified mouse strains and utilizes chromatin immunoprecipitation and RNA-sequencing to identify and interrogate the gene regulatory networks underpinning Shh action. The proposed studies will provide an unprecedented level of insight into morphogen-based mechanisms patterning the mammalian embryo and knowledge gained here from the stem-cell base should be readily translatable to similar human model systems. We anticipate that the findings will have broader significance with respect to cell-fate specification processes during development, repair, and regeneration of many other organ systems where Hedgehog signaling plays a critical role, and enhance our understanding of Hedgehog family signaling in human disease.