Abstract
Follistatin (FS) is one of several secreted proteins that modulate the activity of TGF-beta family members during development. The structural and functional analysis of Drosophila Follistatin (dFS) reveals important differences between dFS and its vertebrate orthologues: it is larger, more positively charged, and proteolytically processed. dFS primarily inhibits signaling of Drosophila Activin (dACT) but can also inhibit other ligands like Decapentaplegic (DPP). In contrast, the presence of dFS enhances signaling of the Activin-like protein Dawdle (DAW), indicating that dFS exhibits a dual function in promoting and inhibiting signaling of TGF-beta ligands. In addition, FS proteins may also function in facilitating ligand diffusion. We find that mutants of daw are rescued in significant numbers by expression of vertebrate FS proteins. Since two PiggyBac insertions in dfs are not lethal, it appears that the function of dFS is non-essential or functionally redundant.