Dermal EZH2 simultaneously orchestrates Wnt/β-catenin signaling dependent dermal differentiation and retinoic acid signaling dependent epidermal proliferation during murine skin development

Tissue development requires complex interactions between signaling factors, transcription factors, and epigenetic regulators. These complex interactions are tightly regulated to balance proliferation and differentiation of dermal fibroblasts and epidermal keratinocytes during skin development, but how this regulation is achieved is unclear. We found that Polycomb Repressive Complex 2 (PRC2), a key epigenetic regulator, is present throughout dermal development and is required for differentiation of murine dermal fibroblasts progenitors and for cell-cell communication to the overlying epidermis, two processes that are poorly understood during skin development. We found dermal Ezh2, the catalytic component of PRC2, is required to spatially restrict Wnt/β-catenin signaling to the sub-ectodermal cells fated to become dermal fibroblast progenitors. We also found dermal Ezh2 ablation results in dermal fibroblast progenitor differentiation into ectopic reticular dermal cells and delayed secondary hair follicle initiation. Additionally, dermal Ezh2 deletion leads to elevated proliferation of epidermal basal keratinocytes resulting in hyperplasia of all epidermal layers. Transient elevation in retinoic acid (RA) signaling in wild-type mice leads to epidermal hyperplasia and small molecule inhibition of RA signaling can rescue epidermal hyperplasia in dermal Ezh2 mutants. Together, our study reveals that PRC2 acts as a rheostat to control the levels of Wnt/β-catenin and RA signaling to respectively impact fibroblast differentiation cell autonomously and keratinocyte proliferation non-cell autonomously.