The transcription factor Grainy head (Grh) is conserved from Drosophila to humans. Drosophila Grh plays important roles in epithelial differentiation and regeneration. To investigate the mechanisms of Grh function, we performed ChIP-sequencing and microarray gene expression analysis and identified Grh target genes in Drosophila embryos at a genome-wide scale. We found Grh ChIP peaks in the proximity of 3754 genes and showed that Grh acts both as an activator and as a repressor. 

Grh regulates distinct genes in different contexts. During wound healing, Grh transcriptionally activates stitcher (stit), a gene encoding a receptor tyrosine kinase. We show that Stit activates two distinct pathways, including Src kinases and extracellular signal-regulated kinase (ERK), after injury. The tyrosine residue Y⁷⁶² mediates Stit binding to the SH2 domains of Src42A, Src64B, or Drk. Src family kinases and Drk act as downstream effectors of Stit in the activation of wound response enhancers. Src family kinases control re-epithelialization, but fail to induce the dpERK accumulation after injury. In contrast, Drk is dispensable in re-epithelialization, but can induce the activation of ERK, which can therefore link RTKs to ERK-mediated Grh-dependent activation of wound response genes. In airways, Grh regulates 1152 target genes encoding various enzymes, signaling proteins, and transcription factors. Grh represses the POU-domain transcription factor Vvl (Ventral veinless). Vvl interacts with Grh and can regulate a set of Grh target genes. Grh and Vvl antagonize each other during airway maturation and tracheal tube elongation. The analysis of Grh-responsive enhancers during embryonic development and in wound healing indicates that Grh cooperates with other transcription factors, such as Vvl, to regulate target gene expression.

In addition, we identify a novel grh PO isoform expressed predominantly in the central nervous system, epidermis, and trachea. Unlike the canonical grh (grh PI) that can regulate endogenous grh PI and grh PO, Grh PO fails to regulate the grh gene transcriptionally. Further functional analysis in the trachea suggests that Grh PO may act as a partial dominant-negative regulator of Grh.