Calcium coordination controls sonic hedgehog structure and Scube2-cubulin domain regulated release

Proteolytic processing of cell-surface bound ligands, called shedding, is a fundamental system to control cell-cell signaling. Yet, our understanding of how shedding is regulated is still incomplete. One way to increase the processing of dual-lipidated membrane-associated Sonic hedgehog (Shh) is to increase the density of substrate and sheddase. This releases and also activates Shh by the removal of lipidated inhibitory N-terminal peptides from their receptor binding sites. Shh release and activation is enhanced by Scube2 [signal sequence, cubulin (CUB) domain, epidermal growth factor (EGF)-like protein 2], raising the question of how this is achieved. Here we show that Scube2 EGF domains prepare specific proteolysis of the inhibitory Shh N-terminus and that CUB domains complete the process by reversing steric masking of this peptide. Steric masking in turn depends on Ca++ occupancy of Shh ectodomains, unveiling a new mode of shedding regulation at the substrate level. Importantly, Scube2 uncouples Shh peptide processing from their lipid-mediated juxtamembrane positioning and thereby explains the long-standing conundrum that N-terminally unlipidated Shh shows patterning activity in Scube2-expressing vertebrates, but not in invertebrates that lack Scube orthologs.