SMADs and YAP compete to control elongation of β-catenin:LEF-1-recruited RNAPII during hESC differentiation.

The Wnt3a/β-catenin and Activin/SMAD2,3 signaling pathways synergize to induce endodermal differentiation of human embryonic stem cells; however, the underlying mechanism is not well understood. Using ChIP-seq and GRO-seq analyses, we show here that Wnt3a-induced β-catenin:LEF-1 enhancers recruit cohesin to direct enhancer-promoter looping and activate mesendodermal (ME) lineage genes. Moreover, we find that LEF-1 and other hESC enhancers recruit RNAPII complexes (eRNAPII) that are highly phosphorylated at Ser5, but not Ser7. Wnt3a signaling further increases Ser5P-RNAPII at LEF-1 sites and ME gene promoters, indicating that elongation remains limiting. However, subsequent Activin/SMAD2,3 signaling selectively increases transcription elongation, P-TEFb occupancy, and Ser7P-RNAPII levels at these genes. Finally, we show that the Hippo regulator, YAP, functions with TEAD to regulate binding of the NELF negative elongation factor and block SMAD2,3 induction of ME genes. Thus, the Wnt3a/β-catenin and Activin/SMAD2,3 pathways act in concert to counteract YAP repression and upregulate ME genes during early hESC differentiation.