Direct Transcriptional Repression of Zfp423 by Zfp521 Mediates a Bone Morphogenic Protein-dependent Osteoblast Versus Adipocyte Lineage Commitment Switch

Osteoblasts and adipocytes arise from a common mesenchymal precursor cell. The cell fate decision of a mesenchymal precursor cell is under the influence of molecular cues and signaling pathways that lead to the activation or repression of lineage-specific transcription factors. The molecular mechanisms determining osteoblast versus adipocyte lineage specificity in response to bone morphogenic protein (BMP) remain unclear. In this study, we describe the mechanism through which Zfp521 (ZNF521), a regulator of lineage progression in multiple immature cell populations, regulates lineage specification of mesenchymal progenitor cells during BMP-induced differentiation events. In vivo deletion or in vitro knockdown of Zfp521 in mesenchymal precursors resulted in increased expression of the adipocyte determinant factor Zfp423 (ZNF423). This was concurrent with the loss of histone H3K9 methylation and an increase in histone H3K9 acetylation at the Zfp423 promoter, which together are indicative of decreased gene repression. Indeed, we found that Zfp521 occupies and represses the promoter and intronic enhancer regions of Zfp423. Accordingly, conditional deletion of Zfp521 inhibited heterotopic bone formation in response to local injection of BMP2. In contrast, marrow adiposity within BMP2-induced bone was markedly enhanced in Zfp521-deficient mice, suggesting that precursor cells lacking Zfp521 differentiate preferentially into adipocytes instead of osteoblasts in response to BMP2. Consistent with a cell-autonomous role of Zfp521 in mesenchymal precursors, knockdown of Zfp521 in stromal cells prevented BMP2-induced osteoblast marker expression and simultaneously enhanced lipid accumulation and expression of adipocyte-related genes. Taken together, the data suggest that Zfp521 is a cell fate switch critical for BMP-induced osteoblast commitment and identify Zfp521 as the intrinsic repressor of Zfp423 and hence of adipocyte commitment during BMP-induced mesenchymal precursor differentiation.