Sox5 functions as a fate switch in medaka pigment cell development.

Mechanisms generating diverse cell types from multipotent progenitors are crucial for normal development. Neural crest cells (NCCs) are multipotent stem cells that give rise to numerous cell-types, including pigment cells. Medaka has four types of NCC-derived pigment cells (xanthophores, leucophores, melanophores and iridophores), making medaka pigment cell development an excellent model for studying the mechanisms controlling specification of distinct cell types from a multipotent progenitor. Medaka many leucophores-3 (ml-3) mutant embryos exhibit a unique phenotype characterized by excessive formation of leucophores and absence of xanthophores. We show that ml-3 encodes sox5, which is expressed in premigratory NCCs and differentiating xanthophores. Cell transplantation studies reveal a cell-autonomous role of sox5 in the xanthophore lineage. pax7a is expressed in NCCs and required for both xanthophore and leucophore lineages; we demonstrate that Sox5 functions downstream of Pax7a. We propose a model in which multipotent NCCs first give rise to pax7a-positive partially fate-restricted intermediate progenitors for xanthophores and leucophores; some of these progenitors then express sox5, and as a result of Sox5 action develop into xanthophores. Our results provide the first demonstration that Sox5 can function as a molecular switch driving specification of a specific cell-fate (xanthophore) from a partially-restricted, but still multipotent, progenitor (the shared xanthophore-leucophore progenitor).