Secreted HHIP1 interacts with heparan sulfate and regulates Hedgehog ligand localization and function.

Vertebrate Hedgehog (HH) signaling is controlled by several ligand-binding antagonists including Patched-1 (PTCH1), PTCH2, and HH-interacting protein 1 (HHIP1), whose collective action is essential for proper HH pathway activity. However, the molecular mechanisms used by these inhibitors remain poorly understood. In this paper, we investigated the mechanisms underlying HHIP1 antagonism of HH signaling. Strikingly, we found evidence that HHIP1 non-cell-autonomously inhibits HH-dependent neural progenitor patterning and proliferation. Furthermore, this non-cell-autonomous antagonism of HH signaling results from the secretion of HHIP1 that is modulated by cell type-specific interactions with heparan sulfate (HS). These interactions are mediated by an HS-binding motif in the cysteine-rich domain of HHIP1 that is required for its localization to the neuroepithelial basement membrane (BM) to effectively antagonize HH pathway function. Our data also suggest that endogenous, secreted HHIP1 localization to HS-containing BMs regulates HH ligand distribution. Overall, the secreted activity of HHIP1 represents a novel mechanism to regulate HH ligand localization and function during embryogenesis.