Secreted ligands in the Dpp/BMP family drive dorsal–ventral (D/V) axis formation in all Bilaterian species. However, maternal factors regulating Dpp/BMP transcription in this process are largely unknown. We identified the BTB domain protein longitudinals lacking-like (lolal) as a modifier of decapentaplegic (dpp) mutations. We show that Lolal is evolutionarily related to the Trithorax group of chromatin regulators and that lolal interacts genetically with the epigenetic factor Trithorax-like during Dpp D/V signaling. Maternally driven Lolal^HA is found in oocytes and translocates to zygotic nuclei prior to the point at which dpp transcription begins. lolal maternal and zygotic mutant embryos display significant reductions in dpp, pMad, and zerknullt expression, but they are never absent. The data suggest that lolal is required to maintain dpp transcription during D/V patterning. Phylogenetic data revealed that lolal is an evolutionarily new gene present only in insects and crustaceans. We conclude that Lolal is the first maternal protein identified with a role in dpp D/V transcriptional maintenance, that Lolal and the epigenetic protein Trithorax-like are essential for Dpp D/V signaling and that the architecture of the Dpp D/V pathway evolved in the arthropod lineage after the separation from vertebrates via the incorporation of new genes such as lolal.

Recently we employed phylogenetics to predict that the cellular interpretation of TGF-β signals is modulated by monoubiquitylation cycles affecting the Smad4 signal transducer/tumor suppressor. This prediction was subsequently validated by experiments in flies, frogs and mammalian cells. Here we apply a phylogenetic approach to the Hippo pathway and predict that two of its signal transducers, Salvador and Merlin/Nf2 (also a tumor suppressor) are regulated by monoubiquitylation. This regulatory mechanism does not lead to protein degradation but instead serves as a highly efficient “off/on” switch when the protein is subsequently deubiquitylated. Overall, our study shows that the creative application of phylogenetics can predict new roles for pathway components and new mechanisms for regulating intercellular signaling pathways.