Which protein inhibits BMP signaling in the dorsal ectoderm?
Follistatin secreted by organizer and dorsal ectoderm binds Activin and BMPs directly in extracellular matrix, sequestering ligands from type I/II receptors, preventing Smad1/5/8 phosphorylation. In dorsal ectoderm during gastrulation, BMP antagonism by Follistatin together with Noggin and Chordin lowers phospho-Smad1 levels, permitting Sox2-positive neural plate specification instead of epidermal keratin. Knockdown of Follistatin elevates BMP, ventralizes ectoderm causing epidermal expansion. VegT and Wnt8 not BMP inhibitors, GBP regulates GSK-3 earlier. Follistatin action specific for dorsal neural induction via BMP inhibition during gastrulation.
Ref: Gilbert, Developmental Biology, 12th ed., Chapter 10: BMP antagonists - Follistatin inhibiting BMP in dorsal ectoderm.