Patched1 and Patched2 inhibit Smoothened non-cell autonomously

Smoothened (Smo) inhibition by Patched (Ptch) is central to Hedgehog (Hh) signaling. Ptch, a proton driven antiporter, is required for Smo inhibition via an unknown mechanism. Hh ligand binding to Ptch reverses this inhibition and activated Smo initiates the Hh response. To determine whether Ptch inhibits Smo strictly in the same cell or also mediates non-cell-autonomous Smo inhibition, we generated genetically mosaic neuralized embryoid bodies (nEBs) from mouse embryonic stem cells (mESCs). These experiments utilized novel mESC lines in which Ptch1, Ptch2, Smo, Shh and 7dhcr were inactivated via gene editing in multiple combinations, allowing us to measure non-cell autonomous interactions between cells with differing Ptch1/2 status. In several independent assays, the Hh response was repressed by Ptch1/2 in nearby cells. When 7dhcr was targeted, cells displayed elevated non-cell autonomous inhibition. These findings support a model in which Ptch1/2 mediate secretion of a Smo-inhibitory cholesterol precursor. DOI: http://dx.doi.org/10.7554/eLife.17634.001


Introduction
Hedgehog (Hh) signaling is critically important during embryonic development and its aberrant regulation is associated with common, lethal birth defects and cancers. Conserved roles as a morphogen and in tissue homeostasis make Hh signaling fundamental to most forms of metazoan life (Briscoe and Thérond, 2013;Hooper and Scott, 2005;Ingham and McMahon, 2001).
Smoothened (Smo) and Patched (Ptch; Ptch1 and Ptch2 in amniotes) are conserved multipass transmembrane proteins required for proper Hh pathway transduction. Smoothened is a putative G-protein-coupled receptor and Ptch has homology to a family of proton-driven antiporters. The regulatory relationship between Ptch and Smo has been the subject of much study, resulting in the following model: (1) Ptch in its unbound state inhibits Smo cell autonomously (2) Hh ligand bound to Ptch releases this inhibition and (3) uninhibited Smo redistributes in the cell and activates transcription of target genes through downstream factors.
While this model has wide acceptance, the Ptch-dependent mechanism responsible for Smo repression has proven elusive. Ptch belongs to the Resistance, Nodulation and Division (RND) family of proton-driven, trimeric efflux pumps that are ubiquitously present in all studied organisms (Nikaido and Takatsuka, 2009). RNDs secrete diverse molecular cargos, including lipophilic and amphiphilic molecules such as antibiotics and sterols. They are well studied in Gram-negative bacteria, where they confer multidrug resistance via antibiotic efflux (Tseng et al., 1999).
According to prevailing models, Ptch inhibits Smo sub-stoichiometrically rather than through a direct binding relationship, by regulating the localization of a Smo regulatory molecule . Despite the discovery of exogenous and endogenous molecules capable of regulating Smo, no Smo-regulatory Ptch substrate has been identified (Sharpe et al., 2015). Nevertheless, several observations indicate that the endogenous cargo of Ptch is a steroidal molecule: (1) the plant-derived steroidal alkaloid cyclopamine binds Smo and inhibits the Hh response (Chen et al., 2002a;Incardona et al., 1998); (2) heterologous Ptch expression in yeast enhances BODIPY-cholesterol efflux (Bidet et al., 2011); (3) the closest prokaryotic homolog of Ptch, HpnH, transports bacterial sterols (hopanoids) from the inner to the outer bacterial membrane (Doughty et al., 2011); (4) 7-dehydroxycholesterol reductase (7DHCR), catalyzes the conversion of 7DHC into cholesterol and genetic loss of 7dhcr is associated with defects in Shh signaling, perhaps via accumulation of a late sterol precursor (or its derivative) that inhibits Smo (Bijlsma et al., 2006;Cohen, 2010;Gruchy et al., 2014;Incardona et al., 2000a;Linder et al., 2015;Sever et al., 2016); (5) Ptch has a sterol-sensing domain (SSD) that is conserved within sterol biogenesis regulatory enzymes, and thus likely binds sterols (Incardona, 2005), and this domain is necessary for Smo inhibition by Ptch in Drosophila (Strutt et al., 2001). Within the third transmembrane domain of the SSD (the fourth transmembrane domain of Ptch1) resides a universally conserved Aspartic acid residue that when mutated in bacterial RNDs blocks transport (Zgurskaya and Nikaido, 1999). Mutation of this residue in Ptch1 yields an allele unable to inhibit Smo both in vivo and in vitro Strutt et al., 2001;Taipale et al., 2000). These observations have led to the hypothesis that Ptch1/2 re-localizes a cholesterol precursor that is inhibitory to Smo (Incardona et al., 1998).
As a proton-driven antiporter of the RND family, Ptch1/2 is predicted to secrete its cargo. The observation that murine fibroblasts overexpressing Ptch1 can condition their supernatant with a Smo inhibitor supports this notion (Bijlsma et al., 2006). However, few reports address non-cell-autonomous Smo regulation by Ptch1 antiporter activity. This may be due to other non-cell autonomous mechanisms of Ptch-mediated inhibition unrelated to its antiporter activity, such as its proposed ability to sequester Hedgehog ligands from the environment and thus suppress the Hh response (Chen and Struhl, 1996;Incardona et al., 2000b;Milenkovic et al., 1999;Strutt et al., 2001). Ligand sequestration by Ptch thus complicates efforts to assess non-cell autonomous antiportermediated Ptch activity. Besides these possible non-cell autonomous activities, Ptch plays a cell autonomous role in the activation of Smo via the accumulation of phosphatidylinositol 4-phosphate (Jiang et al., 2016;Yavari et al., 2010) that can activate Smo via its intracellular C-terminal domain.
We attempted to address the non-cell autonomous contribution of Ptch1/2 to Smo regulation with genetically mosaic neural tissue derived from genome-edited mouse embryonic stem cells (mESCs). As a morphogen, Sonic Hedgehog (Shh) patterns the embryonic vertebrate neural tube through a well-studied transcriptional response (Cohen et al., 2013;Roelink et al., 1994). Shh is expressed ventrally in embryos in the notochord and floor plate, yielding a ventral to dorsal gradient of Hh pathway activity in which ventral cell types have a high level of pathway activation. We can effectively model these signaling events in vitro by differentiating genetically distinct stem cells into neuralized embryoid bodies (nEBs) (Meinhardt et al., 2014;Wichterle et al., 2002). nEBs have previously been shown to be highly responsive to Shh, the Smo agonist SAG, and cyclopamine, indicating that Smo activity is subject to regulation in this system (Frank-Kamenetsky et al., 2002). We have also found that Smo becomes maximally activated in nEBs lacking Ptch1 and Ptch2 (Alfaro et al., 2014).
In our experimental approach, cells in one compartment of genetically mosaic nEBs are either proficient or genetically null for Ptch1/2. We measured Hh pathway activity, and thus assess Ptch1/2mediated non-cell autonomous Smo inhibition in a separate mosaic compartment designed to have active Smo. If the null hypothesis of Ptch1/2 as strict cell-autonomous Smo inhibitors is true, we predict that in mosaic tissues in which cell differ in regard to their Ptch1/2 status the resulting level of Hh response is the average of both constituent cells cultured alone. A rejected null hypothesis supports the notion that Ptch1/2 can inhibit Smo activity non-cell autonomously.
Using genome editing with Tal endonucleases (TALENs) and CRISPR/Cas9, we generated mESC lines genetically null for Ptch1, Ptch2, Smo, Shh and 7dhcr in many combinations. We show that each cell line differentiates as monotypic nEBs to neural progenitor fates predicted according to the established Hh signaling model. We then demonstrate that within genetically mosaic nEBs, cells with Ptch1/2 activity inhibit the Hh response non-cell autonomously in neighboring cells deficient for Ptch1/2 that contain activated Smo. Ptch1/2 also inhibits the response of neighboring wild-type cells to Shh and the Smo agonist SAG. Loss of 7DHCR activity results in an increased ability of Ptch1/2 proficient cells to inhibit the Hh response non-cell autonomously. We attribute these observations to a fundamental function of Ptch1/2 in secreting a steroidal Smo inhibitor via its proton antiporter activity.

Ptch1/2 activity inhibits Smo both cell autonomously and non-cell autonomously
In order to assess if Ptch1/2 activity inhibits Smo in neighboring cells, we established a panel of genome-edited mESC lines harboring null mutations in the Hh pathway genes Ptch1, Ptch2, Smo and Shh. We then co-cultured these cell lines in genetically mosaic nEBs. We used pre-existing mutant cell lines and TAL effector endonucleases (TALENs) to generate our initial mESC panel (Cermak et al., 2011). This approach presents an in vitro model in which we can measure the noncell autonomous effects of Ptch1/2 by varying the Ptch1/2 status of cells and measuring the effect on the Hh response in a specific subset of neighboring cells.
Before using these cell lines in genetically mosaic experiments, we first confirmed that nEBs derived from each cell line in our panel differentiated as expected, given their Ptch1, Ptch2, Shh and Smo genotype. We predicted that upon neural differentiation each cell line would acquire a neural progenitor identity reflecting the status of its core Hh pathway regulatory genes. Immunostaining for four markers of distinct neural progenitor populations along the vertebrate dorsoventral axis was quantified in order to assess identity. Nkx2.2, Olig2 and Isl1/2 served as markers of ventral cell populations with high Hh activity, while Pax7 designated dorsal tissue where the pathway is silent.
The prevailing model for Hh signaling in the neural tube guided our predictions for each cell line. For example, Ptch1 +/LacZ ;Shh -/-mESCs yielded nEBs with little Hh pathway activity and thus high dorsal identity, as indicated by a gain of dorsal Pax7 + cells to levels greater than wild type ( Figure 1A, B,J,K). Because Shh encodes an activating factor, and Pax7 + cells indicate pathway quiescence, this cell line differentiated in the manner predicted. Ptch1 LacZ/LacZ nEBs by contrast were highly ventral ( Figure 1D,M), corroborating previous reports using this cell line, and supporting the canonical view that Ptch1 is a negative pathway regulator (Ptch1 LacZ is an established null allele [Goodrich et al., 1997;Rohatgi et al., 2007]). Shh signaling through Ptch2 in cells null for Ptch1 has also been observed and thus unsurprisingly Ptch1 LacZ/LacZ ;Shh -/-nEBs had reduced numbers of Nkx2.2 + /Olig2 + cells ( Figure 1E,N), compared to Ptch1 LacZ/LacZ nEBs, indicating ligand dependency of the response. As previously reported, Ptch1 LacZ/LacZ ;Ptch2 -/-nEBs differentiated into identities associated with high Hh pathway activity, indicated by robust Nkx2.2, Isl1/2 and Olig2 expression ( Figure 1G,P) . Ptch1 LacZ/LacZ ;Ptch2 -/-;Shh -/-nEBs had unaffected ventral identity ( Figure 1H Because of their high level of Hh pathway activity, we used Ptch1 LacZ/LacZ ;Ptch2 -/-;Shh -/-mESCs as sensitized cells in which non-cell autonomous Smo-inhibitory effects mediated by Ptch1/2 in adjacent cells could be measured. We reasoned that genetic ablation of both Ptch1 and Ptch2 would be necessary to assess non-cell autonomous Smo regulation in these cells because Ptch2 compensates for Ptch1 loss in cell autonomous Smo regulation Zhulyn et al., 2015). We previously reported that the Hh pathway in Ptch1 LacZ/LacZ ;Ptch2 -/-nEBs could not be further activated by the Smo agonist SAG (Chen et al., 2002b), suggesting maximal Smo activation in the absence of Ptch1/2. To assess ligand-independent cell non-autonomous signaling, Shh -/cells were necessary because Shh is expressed in Ptch1 -/-; Ptch2 -/-nEBs and the Ptch1 -/mouse neural tube Goodrich et al., 1997).

Gene editing in a Disp1 -/background reveals non-cell autonomous regulation of Smo-mediated Ptch1:LacZ expression in mosaic nEBs
As an independent and more rapid assay for non-cell autonomous effects of Ptch1/2 on Smo we assessed Ptch1:LacZ induction (Goodrich et al., 1997) in nEBs using Ptch1 +/LacZ and Ptch1 LacZ/LacZ mESCs, and edited cell lines derived from them. Before employing this assay in mosaic nEBs, we investigated whether Ptch1:LacZ induction mirrored ventral neural progenitor differentiation Smo -/-mESCs were derived previously and constitutively express Rosa26:LacZ (Zhang et al., 2001). These measurements corroborate our findings in monotypic nEBs with neural progenitor markers and support a role for Smo-dependent, Shh ligand-mediated signaling in nEBs lacking Ptch1 (but not Ptch2), and the loss of Shh dependence in the complete absence of Ptch1/2 ( Figure 3A). These   data suggest that Ptch1:LacZ is a reliable output for Hh pathway activity across cell lines. We performed a time-course experiment to more precisely establish the point of maximal pathway activation. We found that Ptch1:LacZ was strongly induced in Ptch1 LacZ/LacZ ;Ptch2 -/-;Shh -/-nEBs after 72 hr differentiation ( Figure 3C), and this high level of expression persisted for several days. Ptch1:LacZ expression is suppressed after treatment with cyclopamine, indicating that Ptch1:LacZ upregulation requires Smo ( Figure 3B).
We measured Ptch1:LacZ expression in mosaic nEBs at 72 hr when Ptch1:LacZ measurement reaches its maximum ( Figure 3C Figure 3K), indicating that changes in LacZ levels in mosaic nEBs are not attributable to disparities in cell growth or adhesion during the culture period. These results suggest that endogenous Ptch1/2 suppress the Hh response non-cell autonomously in cells lacking Ptch1/2 activity.
To further test the role of 7DHC in Smo inhibition, we cultured Ptch1 LacZ/LacZ ;Ptch2 -/-;Shh -/-nEBs in its presence. Corroborating earlier findings (Bijlsma et al., 2006), we observed a decreased Hh response in nEBs treated with 7DHC compared to control treatment with cholesterol, regardless of whether the nEB was mosaic or comprised exclusively of Ptch1 LacZ/LacZ ;Ptch2 -/-;Shh -/cells ( Figure 4C). We additionally saw differences between the mosaic nEBs. A larger inhibition of the Hh response by exogenous 7DHC was observed in Ptch1 LacZ/LacZ ;Ptch2 -/-;Shh -/cells co-cultured 1:1 in nEBs with Shh -/as opposed to Shh -/-;7dhcr -/cells ( Figure 4C). We speculate that cells containing Ptch1/2 may be able to process or transport exogenous 7DHC into a more potent non-cell autonomous inhibitor of the Hh response in neighboring Ptch1 LacZ/LacZ ;Ptch2 -/-;Shh -/cells, and that this effect is further enhanced in cells genetically intact for 7dhcr and presumably producing endogenous 7DHC, in addition to the exogenous source. These findings are consistent with Ptch1/2 antiporter activity mediating secretion of 7DHC, or an oxysterol derivative like 3b,5a-dihydroxycholest-7-en-6one (Sever et al., 2016), as a mechanism to inhibit Smo in neighboring cells. Motor neuron differentiation in wild-type HB9:GFP cells is attenuated by Ptch1/2 in nearby cells via a SAG-competitive mechanism Motor neurons arise from a population of neural progenitors in the ventral neural tube, and Hh pathway activation is required for motor neuron differentiation in vivo as well as in nEBs. We used the induction of GFP in HB9:GFP  mESCs as an independent lineage-restricted measure of the Hh response in genetically mosaic nEBs. HB9:GFP + cells had motor neuron morphology and co-labeled with Isl1/2 immunostain, and thus serve as a measure for motor neuron induction ( Figure 5B, Figure 1-figure supplement 1). Mosaic nEBs consisting of Ptch1 +/LacZ ;Shh -/-, Ptch1 LacZ/-;Shh -/or Ptch1 LacZ/LacZ ;Ptch2 -/-;Shh -/-mESCs mixed 10:1 with HB9:GFP mESCs were generated. We observed a small but significant increase in HB9:GFP + motor neurons when these cells were co-cultured with Ptch1 LacZ/LacZ ;Ptch2 -/-;Shh -/cells as compared to Ptch1 +/LacZ ;Shh -/or Ptch1 LacZ/-;Shh -/cells ( Figure 5A,C).
While we hypothesize that Ptch1/2-expressing cells produce a Smo inhibitor, it remains a formal possibility that cells lacking Ptch1/2 have an activating effect on nearby cells. This activating activity could be indirect in that Shh potentially produced by HB9:GFP cells would no longer be sequestered by Ptch1/2 in adjacent cells ( Figure 1T), making Shh available to the HB9:GFP cells themselves. To discriminate between these possibilities, we treated mosaic nEBs with SAG, a small molecule Smo agonist thought to antagonize the Smo-inhibitory Ptch1/2 substrate (Chen et al., 2002a;Sharpe et al., 2015). We expected decreased availability of the inhibitor, due to Ptch1/2 absence in neighboring cells, to enhance SAG effects. If cells lacking Ptch1/2 release an activator of the Hh response, its effects in combination with SAG are expected to be additive.
As predicted, 10 nM and 100 nM SAG induces motor neuron differentiation in HB9:GFP cells under all mosaic conditions ( Figure 5A). However, a strong synergistic effect was observed between Ptch1/2 loss in surrounding cells and SAG-induced motor neuron differentiation in HB9:GFP cells ( Figure 5A,B). We found that compared to Ptch1 LacZ/LacZ ;Ptch2 -/-;Shh -/cells, Ptch1 +/LacZ ;Shh -/cells suppressed motor neuron induction at both SAG concentrations, while Ptch1 LacZ/-;Shh -/cells also suppressed motor neuron induction to an intermediate degree (presumably via Ptch2 activity). This observation is consistent with Ptch1/2 cargo acting as a SAG antagonist and is not easily reconciled with impaired Hh ligand sequestration due to the lack of Ptch1/2 in the environment, as this scenario should have little effect on SAG-mediated Smo activation.
Three-part mosaic nEBs reveal a non-cell autonomous role for Ptch1/2 in regulating the response to Shh ligand Shh activates Smo activity indirectly, unlike SAG, after first binding Ptch1/2, according to the canonical Hh signaling model (Chen et al., 2002b). To determine whether our previous findings apply to signaling by mature Shh ligand, we investigated whether Ptch1/2 within mosaic nEBs inhibit Smo activation in HB9:GFP cells in response to Shh expressed by a third cell population. To accomplish this, we generated three-part mosaic nEBs including 1% wild type cells harboring the EF1a:Shh transgene. These cells functioned as sparse, localized sources of Shh in mosaic nEBs. Effects of Shh produced by these cells were measured in HB9:GFP cells (5% of cells) in mosaic nEBs in which the Ptch1/2 genotype in the third and predominant compartment (94% of cells) was varied.
Our experiments with SAG ( Figure 5) make it unlikely that lack of Hh ligand sequestration causes non-cell autonomous enhancement of the Hh response in nEBs lacking Ptch1/2. Nevertheless, we directly tested Shh abundance in mosaic nEBs. Live staining with the anti-Shh monoclonal antibody 5E1 is expected to exclusively bind Shh present in the extracellular space. Moreover, the 5E1 epitope on Shh overlaps with the binding site of Ptch1, preventing visualization of Ptch1/2 sequestered Shh (Fuse et al., 1999;Pepinsky et al., 2000). We found no difference in extracellular Shh staining in various mosaic nEBs ( Figure 6-figure supplement 1), further supporting the idea that non-cell autonomous inhibition by Ptch1/2 of the Hh response does not involve Shh sequestration.
The activated Hh pathway in Ptch1/2-deficient cells could cause motor neuron induction via unknown downstream factors. To address this, we generated three-part mosaic nEBs using Ptch1

Discussion
Mosaic nEBs comprised of mESCs with novel, complex genotypes allow us to study interactions between cell populations with resolution not easily achieved in vivo. Within this system, lineagerestricted reporter cells unambiguously indicate non-cell autonomous Smo inhibition by nearby cells expressing Ptch1/2 at endogenous levels. A logical interpretation of these results is that Ptch1/2 mediate the secretion of a Smo inhibitor that affects the Hh response both cell autonomously, and in nearby cells.
Observations similar to ours but using overexpressed Ptch1 have been reported in fibroblasts and our experiments support this finding (Bijlsma et al., 2006). Detecting these activities of Ptch1/2 expressed at endogenous levels in nEBs resolves the argument that overexpressed Ptch1/2 constructs could have non-physiological effects. Because Shh signaling in nEBs patterns multiple cell fates and mimics neural tube induction, these results are likely relevant to in vivo signaling.
Although all independently derived Ptch1/2 cells were equally unable to inhibit the Hh response non-cell autonomously, we found that independent Ptch1 -/lines varied in regard to this activity. Notably, cells with a dorsal identity (Disp1 -/-;Ptch1 -/-;Shh -/-) are better non-cell autonomous repressors of the Hh response than cells with a more ventral identity (Ptch1 LacZ/LacZ ;Shh -/-). We speculate that this is due to varying levels of Ptch2 activity. It also appears that the loss of Smo decreases the ability of Ptch1/2 to inhibit the Hh response non-cell autonomously. This observation is easily explained by a decrease in Ptch1/2 levels as Ptch1/2 expression is under the control of Smo. Thus, even in the complete absence of Hh pathway activation, Ptch1/2 can still inhibit Smo. This is consistent with the observation that in tissues without detectable levels of Ptch1/2, Smo remains inactive.
Our findings are consistent with Ptch1/2 functioning as proton-driven efflux pumps in the RND family (Nikaido and Takatsuka, 2009). RND antiporters utilize a pH gradient to drive transport and Ptch1/2 thus likely function in acidified compartments. We previously demonstrated that Ptch1 localizes to late endosomes while mediating Shh uptake, and that Shh signaling requires endosomal acidification (Incardona et al., 2002). Conserved acidic residues required for proton flux in prokaryotic RNDs are also required for Ptch1 to repress Smo Strutt et al., 2001). One possibility is that Ptch1/2 enrich the endosomal lumen or intraluminal vesicular in multivesicular endosomes (MVEs) with a Smo inhibitor. Exosomal release would allow this inhibitor to enter the extracellular environment and regulate Smo both cell autonomously as well as non-cell autonomously.
Our observation that cells enriched in sterol precursors are better cell non-cell autonomous inhibitors of the Hh response complements earlier observations implicating sterols as the Smo inhibitors transported by Ptch1/2. The observation that 7DHCR loss coincides with reduced Hh signaling is refined by our results showing that Ptch1/2 become more effective non-cell autonomous inhibitors of Smo in nearby cells when expressed in cells enriched for 7DHC or its derivatives.
Why the Smo-inhibitory Ptch1/2 cargo, despite its likely abundance in cells, fails to inhibit Smo without being acted on (cell autonomously or non-cell autonomously) by Ptch1/2 remains unresolved. However, our results show that 7DHC becomes a more potent inhibitor when acted upon by Ptch1/2 activity, and when combined with the evidence that Ptch1/2 function as proton-driven antiporters, it becomes plausible that the Ptch1/2 cargo becomes inhibitory after translocation or secretion. This view is consistent with the known role of the prokaryotic RND HpnN (Doughty et al., 2011) that transports bacterial sterols between inner and outer membranes. It would also be consistent with the function of NPC1, a close relative of Ptch that translocates cholesterol between intracellular membranes (Blanchette-Mackie, 2000).
Ptch1/2 mutations drive the formation of several tumors, and an important ramification of our findings is that Ptch1/2 disruption enhances not only cell autonomous Hh responses, but also Smo activation in adjacent cells with intact Ptch1/2 activity (Barakat et al., 2010). The finding that genetically normal stromal cells respond to Shh expressing tumors by infiltrating and supporting them heightens the importance of our observations because Ptch1/2 loss in the tumor may affect Shh sensitivity in supporting stromal cells non-cell autonomously (Yauch et al., 2008). Our results also predict that even in the absence of Ptch1/2, cells remain sensitive to Hh ligands signaling in nearby cells. Anticancer strategies based on ligand sequestration or inactivation therefore remain viable treatment options.
Hh signaling plays many critical roles during development as a morphogen. Responding cells interpret graded Hh ligand distributions, resulting in stereotyped patterning, and Ptch1/2 have complex roles in this process. As Hh receptors, Ptch1/2 bind extracellular Shh and initiate the response. In Drosophila, Ptch activation results in the accumulation of phosphatidylinositol 4-phosphate that in turn activates Smo via its intracellular C-terminal domain (Jiang et al., 2016;Yavari et al., 2010), a mechanism conserved in vertebrates (Jiang et al., 2016). Invariably, Hh signaling induces Ptch1/2 expression (Holtz et al., 2013) and Ptch1/2 induction then leads to negative feedback, possibly by secreting more Smo inhibitor, increasing Shh sequestration, or both. Our finding that Ptch1/2 inhibit the Hh response non-cell autonomously, even in nEBs devoid of Shh ligand, supports the notion that the non-cell autonomous inhibition mediated by Ptch1/2 is mediated by the antiporter activity of Ptch1/2, rather than by ligand sequestration. The ability of relatively few Ptch1/2 expressing cells to inhibit the Hh response pathway further supports this idea.
Together these findings indicate that Ptch1/2 act broadly and communally inhibit Smo in tissues undergoing patterning. According to this model, local sensitivity to Shh is highly buffered and equalized between cells, aiding the formation of a smooth response gradient in the Shh morphogenetic field.

Cell lines
Ptch1 +/LacZ and Ptch1 LacZ/LacZ mESCs were gifts from Dr. Matthew Scott (Stanford University and HHMI). Identity of these lines was confirmed by the presence of the LacZ recombination in the Ptch1 locus, the presence of 40 chromosomes per cell, and mouse-specific DNA sequences of the edited genes. Smo -/-mESCs were a gift from Dr. Andrew McMahon (University of Southern California), and their identity was confirmed by the presence of the ROSA26:LacZ locus and the absence of Smo. HB9:GFP mESCs were a gift from Dr. Thomas Jessell (Columbia University). Their identity was confirmed by the presence of the Hb9:gfp transgene. Disp1 -/-mESCs and wild type (AB1) mESCs, and mESCs overexpressing Shh were previously described (Etheridge et al., 2010). Identity of these lines was confirmed by the presence of 40 chromosomes per cell, and mouse-specific DNA sequences of the edited genes. mESC lines were maintained using standard conditions in dishes coated with gelatin, without feeder cells. Cells were routinely tested for Mycoplasm by Hoechst stain, and grown in the presence of tetracycline and gentamycin at regular intervals. Cultures with visible Mycoplasma infection were discarded. None of the cell lines used in this study is listed in the Database of Cross-Contaminated or Misidentified Cell Lines.

Imaging and quantification of nuclear progenitor markers
Mounted nEBs were imaged with a Zeiss Observer fluorescence microscope with a 20x objective. Within each experiment, stacks were de-convolved and resulting image files were scrambled for unbiased, blind counting.

Fluorescent tracking of cells
Cells were singularized and washed twice with PBS. Cells were stained with 20 mM CellTracker Blue CMAC or CellTracker Green CMFDA (Thermo Fisher Scientific, Waltham MA) in DFNB for 45 min. The cells were mixed as described above, incubated at 37˚C with agitation (~0.8 Hz) for 48 hr, fixed in 4% PFA for 10 min, and mounted for microscopy. Signal was insufficient at 72 hr.
Neuralized embryoid body differentiation mESCs were differentiated into nEBs using established procedures . nEBs were aggregated for 48 hr in DFNB medium in Petri dishes rotated at 0.8 Hz. 2 mM Retinoic Acid (RA) was added at 48 hr. nEBs were fixed 48 hr after the addition of RA for antibody staining of neural progenitors. nEBs were fixed 96 hr after the addition of RA for imaging and quantifying HB9:GFP fluorescence.
Reporter gene assay for Ptch1:LacZ activity nEBs were collected, washed once in PBS and lysed in 100 mM potassium phosphate, pH 7.8, 0.2% Triton X-100. Lysates were analyzed using the Galacto-Light chemiluminescent kit (Applied Biosciences, Foster City, CA) for Ptch1:LacZ expression level. Lysates were normalized for total protein using the Bradford reagent (BioRad, Hercules, CA). At least three technical replicates are reported for each measurement.

Genome editing
TALEN constructs, transfection, mESC clone selection and genotyping, and domain architectures for TALEN constructs targeting Shh and Ptch2 were previously described . Ptch1 and Smo were targeted similarly. We repeated the protocol sequentially in mESC lines to generate