C-terminal domain (CTD) small phosphatase-like 2 modulates the canonical bone morphogenetic protein (BMP) signaling and mesenchymal differentiation via Smad dephosphorylation.

The bone morphogenetic protein (BMP) signaling pathway regulates a wide range of cellular responses in metazoans. A key step in the canonical BMP signaling is the phosphorylation and activation of transcription factors Smad1, Smad5, and Smad8 (collectively Smad1/5/8) by the type I BMP receptors. We previously identified PPM1A as a phosphatase toward dephosphorylation of all receptor-regulated Smads (R-Smads), including Smad1/5/8. Here we report another nuclear phosphatase named SCP4/CTDSPL2, belonging to the FCP/SCP family, as a novel Smad phosphatase in the nucleus. SCP4 physically interacts with and specifically dephosphorylates Smad1/5/8, and as a result attenuates BMP-induced transcriptional responses. Knockdown of SCP4 in multipotent mesenchymal C2C12 cells leads to increased expression of BMP target genes and consequently promotes BMP-induced osteogenic differentiation. Collectively, our results demonstrate that SCP4, as a Smad phosphatase, plays a critical role in BMP-induced signaling and cellular functions.