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The liver and pancreas originate from overlapping embryonic regions, and single-cell lineage tracing in zebrafish has shown that Bone morphogenetic protein 2b (Bmp2b) signaling is essential for determining the fate of bipotential hepatopancreatic progenitors towards the liver or pancreas. Despite its pivotal role, the gene regulatory networks functioning downstream of Bmp2b signaling in this process are poorly understood. We have identified  four and a half LIM domains 1b  ( fhl1b ), which is primarily expressed in the prospective liver anlage, as a novel target of Bmp2b signaling.  fhl1b  depletion compromised liver specification and enhanced induction of pancreatic cells from endodermal progenitors. Conversely, overexpression of  fhl1b  favored liver specification and inhibited induction of pancreatic cells. By single-cell lineage tracing, we showed that  fhl1b  depletion led lateral endodermal cells, destined to become liver cells, to become pancreatic cells. Reversely, when  fhl1b  was overexpressed, medially located endodermal cells, fated to differentiate into pancreatic and intestinal cells, contributed to the liver by directly or indirectly modulating the discrete levels of  pdx1  expression in endodermal progenitors. Moreover, loss of  fhl1b  increased the regenerative capacity of β-cells by increasing  pdx1  and  neurod  expression in the hepatopancreatic ductal system. Altogether, these data reveal novel and critical functions of Fhl1b in the hepatic versus pancreatic fate decision and in β-cell regeneration.

Four and a Half LIM Domains 1b (Fhl1b) Is Essential for Regulating the Liver versus Pancreas Fate Decision and for β-Cell Regeneration