Nodal signaling recruits the histone demethylase Jmjd3 to counteract polycomb-mediated repression at target genes.

Both intercellular signaling and epigenetic mechanisms regulate embryonic development, but it is unclear how they are integrated to establish and maintain lineage-specific gene expression programs. Here, we show that a key function of the developmentally essential Nodal-Smads2/3 (Smad2 and Smad3) signaling pathway is to recruit the histone demethylase Jmjd3 to target genes, thereby counteracting repression by Polycomb. Smads2/3 bound to Jmjd3 and recruited it to chromatin in a manner that was dependent on active Nodal signaling. Knockdown of Jmjd3 alone substantially reduced Nodal target gene expression, whereas in the absence of Polycomb, target loci were expressed independently of Nodal signaling. These data establish a role for Polycomb in imposing a dependency on Nodal signaling for the expression of target genes and reveal how developmental signaling integrates with epigenetic processes to control gene expression.