The feedback regulator Nord controls Dpp/BMP signaling via extracellular interaction with Dally in the Drosophila wing.

The Drosophila BMP 2/4 homologue Decapentaplegic (Dpp) acts as a morphogen to regulate diverse developmental processes, including wing morphogenesis. Transcriptional feedback regulation of this pathway ensures tightly controlled signaling outputs to generate the precise pattern of the adult wing. Nevertheless, few direct Dpp target genes have been explored and our understanding of feedback regulation remains incomplete. Here we employ transcriptional profiling following dpp conditional knockout to identify nord, a novel Dpp/BMP feedback regulator. nord mutants generated by CRISPR/Cas9 mutagenesis produce a smaller wing and display low penetrance venation defects. At the molecular level, nord encodes a secreted heparin-binding protein, and we show that its overexpression is sufficient to antagonize Dpp/BMP signaling. Mechanistically, we demonstrate that Nord physically interacts with the Dpp/BMP co-receptor Dally and promotes its degradation. In sum, we propose that Nord fine-tunes Dpp/BMP signaling by regulating Dally availability on the cell surface, with implications for both developmental and disease models.