Abstract
Understanding how embryonic progenitors decode extrinsic signals and transform into lineage-specific regulatory networks to drive cell fate specification is a fundamental, yet challenging question. Here, we develop a new model of surface epithelium (SE) differentiation induced by human embryonic stem cells (hESCs) using retinoic acid (RA), and identify BMP4 as an essential downstream signal in this process. We show that the retinoid X receptors, RXRA and RXRB, orchestrate SE commitment by shaping lineage-specific epigenetic and transcriptomic landscapes. Moreover, we find that TCF7, as a RA effector, regulates the transition from pluripotency to SE initiation by directly silencing pluripotency genes and activating SE genes. MSX2, a downstream activator of TCF7, primes the SE chromatin accessibility landscape and activates SE genes. Our work reveals the regulatory hierarchy between key morphogens RA and BMP4 in SE development, and demonstrates how the TCF7-MSX2 axis governs SE fate, providing novel insights into RA-mediated regulatory principles.