Abstract Gene activation by mammalian transcription factors (TFs) requires dynamic, multivalent, and selective interactions of their intrinsically disordered low-complexity domains (LCDs), but how such interactions mediate transcription remains unclear. It has been proposed that extensive LCD-LCD interactions culminating in liquid-liquid phase separation (LLPS) of TFs is the dominant mechanism underlying transactivation. Here, we investigated how tuning the amount and localization of LCD-LCD interactions in vivo affects transcription of endogenous human genes. Quantitative single-cell and single-molecule imaging reveals that the oncogenic TF EWS/FLI1 requires a finely tuned range of LCD-LCD interactions to efficiently activate target genes. Modest or more dramatic increases in LCD-LCD interactions toward putative LLPS repress EWS/FLI1-driven transcription in patient cells. Likewise, ectopically creating LCD-LCD interactions to sequester EWS/FLI1 into a bona fide LLPS compartment, the nucleolus, inhibits EWS/FLI1-driven transcription and oncogenic transformation. Our findings reveal fundamental principles underlying LCD-mediated transcription and suggest mislocalizing specific LCD-LCD interactions as a novel therapeutic strategy for targeting disease-causing TFs.
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