Crosstalk between chromatin and the transcription factor Shavenbaby defines transcriptional output along the Drosophila intestinal stem cell lineage.
The transcription factor Shavenbaby (Svb), the only member of the OvoL family in Drosophila, controls intestinal stem cell differentiation. Post-translational modification of Svb produces two protein isoforms, Svb-ACT and Svb-REP, which promote intestinal stem cell renewal or differentiation, respectively. Using engineered cell lines, we express either isoform to define their mode of action, and develop an unbiased method to identify Svb target genes in intestinal cells. Within a given cell type, Svb-ACT and Svb-REP antagonistically regulate the expression of a set of target genes, binding specific enhancers whose accessibility is constrained by. During intestinal differentiation, the set of target genes progressively changes, together with chromatin accessibility. Moreover, Svb-REP binding stabilizes three-dimensional enhancer-promoter loops, while influencing the local chromatin landscape to repress target genes. We propose that SvbACT-to-REP switch promotes enterocyte differentiation of intestinal stem cells through direct gene regulation and chromatin remodeling.