Assembly of mTORC3 Involves Binding of ETV7 to Two Separate Sequences in the mTOR Kinase Domain.

mTOR plays a crucial role in cell growth by controlling ribosome biogenesis, metabolism, autophagy, mRNA translation, and cytoskeleton organization. It is a serine/threonine kinase that is part of two distinct extensively described protein complexes, mTORC1 and mTORC2. We have identified a rapamycin-resistant mTOR complex, called mTORC3, which is different from the canonical mTORC1 and mTORC2 complexes in that it does not contain the Raptor, Rictor, or mLST8 mTORC1/2 components. mTORC3 phosphorylates mTORC1 and mTORC2 targets and contains the ETS transcription factor ETV7, which binds to mTOR and is essential for mTORC3 assembly in the cytoplasm. Tumor cells that assemble mTORC3 have a proliferative advantage and become resistant to rapamycin, indicating that inhibiting mTORC3 may have a therapeutic impact on cancer. Here, we investigate which domains or amino acid residues of ETV7 and mTOR are involved in their mutual binding. We found that the mTOR FRB and LBE sequences in the kinase domain interact with the pointed (PNT) and ETS domains of ETV7, respectively. We also found that forced expression of the mTOR FRB domain in the mTORC3-expressing, rapamycin-resistant cell line Karpas-299 out-competes mTOR for ETV7 binding and renders these cells rapamycin-sensitive in vivo. Our data provide useful information for the development of molecules that prevent the assembly of mTORC3, which may have therapeutic value in the treatment of mTORC3-positive cancer.

Establishment of a transgenic mouse to model ETV7 expressing human tumors.

The ETS transcription factor ETV7 has been characterized as a hematopoietic oncoprotein, which requires cooperating mutations for its leukemogenic activity. Although the ETV7 gene is highly conserved among vertebrates, part of the rodents, including Mus musculus, deleted the Etv7 gene locus. Many human hematopoietic malignancies upregulate ETV7 expression but contrary to ETV7's role in oncogenesis, its physiological role in normal tissues is unknown. To determine the physiological function of ETV7 in vivo and determine its role in tumorigenesis in a mouse model, we have generated an ETV7 transgenic mouse that carries a single copy of human BAC DNA containing the ETV7 gene locus and its regulatory sequences. ETV7 heterozygous (ETV7Tg+/WT) mice were fertile, normal in size and born at a normal Mendelian frequency. They had a normal blood count, did not display any gross physical or behavioral abnormalities, and were not tumor-prone. The ETV7 expression pattern in hematopoietic cells of ETV7Tg+/WT mice is very similar to that in human hematopoietic cells. To examine the oncogenic potential of ETV7 in vivo, we crossed ETV7Tg+/WT mice with tumor-prone mouse models. ETV7 greatly accelerated loss of Pten (phosphatase and tensin homolog)-evoked leukemogenesis in PtenΔ/ΔETV7Tg+/WT mice after deletion of the conditional Pten allele. Consistent with this observation, ETV7 expression enhanced the colony-forming and self-renewal activities of primary myeloid Pten-/- cells. In this study we established a transgenic mouse in which we can more accurately model ETV7-associated human tumorigenesis in vivo.

Phosphorylation of TSC2 by PKC-δ reveals a novel signaling pathway that couples protein synthesis to mTORC1 activity.

Downstream of insulin-like growth factor receptor, the TSC1/2/ TCB1D7 (tuberous sclerosis complex) and mTOR (mechanistic target of rapamycin) pathways are implicated in many human diseases, including cancer and diabetes. Targeting this pathway is currently an important approach for palliating or eradicating cancer. Downstream of mTOR, translational machinery targeting holds great promise for anticancer drug development. Therefore, we investigated whether the protein synthesis machinery that is regulated by mTORC1 (mTOR complex 1) signaling can in turn regulate mTORC1 activity. We found that inhibition of protein synthesis results in rapid activation of mTORC1 signaling, thereby uncovering a feedback loop between mTOR and the translation machinery. This mTORC1 activation requires tuberous sclerosis complex (TSC) but is independent of AKT. In addition, by using a PKC-δ (protein kinase c delta)-specific inhibitor and PKC-δ siRNA knockdown, we found that PKC-δ kinase activity is required for mTORC1 activation in response to translation inhibitors. Furthermore, translation inhibition activates PKC-δ. Subsequently, we investigated whether PKC-δ can phosphorylate and inactivate TSC1/2, leading to mTORC1 activation. In vitro kinase assays showed direct phosphorylation of TSC2 (S932 and S939) by PKC-δ, which was confirmed by mass spectrometry. In vivo kinase analysis further indicated that both S932 and S939 are phosphorylated in response to translation inhibitors. Finally, phosphorylation defective TSC2 mutants (S932A and S939A single mutants and a S932A/S939A double mutant) failed to upregulate mTORC1 activity in the presence of translation inhibitors, suggesting that activation of mTORC1 by translation inhibitors is mediated by PKC-δ phosphorylation of TSC2 at S932/S939, which inactivates TSC.

Modeling of the human alveolar rhabdomyosarcoma Pax3-Foxo1 chromosome translocation in mouse myoblasts using CRISPR-Cas9 nuclease.

Many recurrent chromosome translocations in cancer result in the generation of fusion genes that are directly implicated in the tumorigenic process. Precise modeling of the effects of cancer fusion genes in mice has been inaccurate, as constructs of fusion genes often completely or partially lack the correct regulatory sequences. The reciprocal t(2;13)(q36.1;q14.1) in human alveolar rhabdomyosarcoma (A-RMS) creates a pathognomonic PAX3-FOXO1 fusion gene. In vivo mimicking of this translocation in mice is complicated by the fact that Pax3 and Foxo1 are in opposite orientation on their respective chromosomes, precluding formation of a functional Pax3-Foxo1 fusion via a simple translocation. To circumvent this problem, we irreversibly inverted the orientation of a 4.9 Mb syntenic fragment on chromosome 3, encompassing Foxo1, by using Cre-mediated recombination of two pairs of unrelated oppositely oriented LoxP sites situated at the borders of the syntenic region. We tested if spatial proximity of the Pax3 and Foxo1 loci in myoblasts of mice homozygous for the inversion facilitated Pax3-Foxo1 fusion gene formation upon induction of targeted CRISPR-Cas9 nuclease-induced DNA double strand breaks in Pax3 and Foxo1. Fluorescent in situ hybridization indicated that fore limb myoblasts show a higher frequency of Pax3/Foxo1 co-localization than hind limb myoblasts. Indeed, more fusion genes were generated in fore limb myoblasts via a reciprocal t(1;3), which expressed correctly spliced Pax3-Foxo1 mRNA encoding Pax3-Foxo1 fusion protein. We conclude that locus proximity facilitates chromosome translocation upon induction of DNA double strand breaks. Given that the Pax3-Foxo1 fusion gene will contain all the regulatory sequences necessary for precise regulation of its expression, we propose that CRISPR-Cas9 provides a novel means to faithfully model human diseases caused by chromosome translocation in mice.

Mitochondrial proteostasis mediated by CRL5 Ozz and Alix maintains skeletal muscle function.

High energy-demanding tissues, such as skeletal muscle, require mitochondrial proteostasis to function properly. Two quality-control mechanisms, the ubiquitin proteasome system (UPS) and the release of mitochondria-derived vesicles, safeguard mitochondrial proteostasis. However, whether these processes interact is unknown. Here we show that the E3 ligase CRL5 Ozz , a member of the UPS, and its substrate Alix control the mitochondrial concentration of Slc25A4, a solute carrier that is essential for ATP production. The mitochondria in Ozz -/- or Alix -/- skeletal muscle share overt morphologic alterations (they are supernumerary, swollen, and dysmorphic) and have abnormal metabolomic profiles. We found that CRL5 Ozz ubiquitinates Slc25A4 and promotes its proteasomal degradation, while Alix facilitates SLC25A4 loading into exosomes destined for lysosomal destruction. The loss of Ozz or Alix offsets steady-state levels of Slc25A4, which disturbs mitochondrial metabolism and alters muscle fiber composition. These findings reveal hitherto unknown regulatory functions of Ozz and Alix in mitochondrial proteostasis.

PAX3-FOXO1 and FGFR4 in alveolar rhabdomyosarcoma.

We and others have identified FGFR4 as a direct transcriptional target of the alveolar rhabdomyosarcoma (ARMS) specific fusion protein, PAX3-FOXO1. We hypothesized fibroblast growth factor receptor 4 (FGFR4) may act as an effector of PAX3-FOXO1, contributing to PAX3-FOXO1 tumorigenic phenotypes. However, we demonstrate that enhanced expression of FGFR4 does not contribute to inhibited differentiation, enhanced proliferation, or transformation downstream of PAX3-FOXO1 in primary mouse myoblasts. Therefore we were unable to identify any contribution of up regulation of wild type FGFR4 to PAX3-FOXO1 driven tumorigenesis. Conversely, a constitutively active mutant of FGFR4 can enhance primary myoblast proliferation and transformation, indicating activating mutations of FGFR4 could contribute to the development and progression of ARMS. We sequenced the FGFR4 mRNA from five ARMS cell lines and identified no somatic mutations, nor any association with any human single nucleotide polymorphism within the FGFR4 coding region.

Slug, a highly conserved zinc finger transcriptional repressor, protects hematopoietic progenitor cells from radiation-induced apoptosis in vivo.

We show here that a zinc finger transcriptional repressor, Slug, which is aberrantly upregulated by the E2A-HLF oncoprotein in pro-B cell acute leukemia, functions as an antiapoptotic factor in normal hematopoietic progenitor cells. Slug(-/-) mice were much more radiosensitive than wild-type mice, dying earlier and showing accentuated decreases in peripheral blood cell counts, as well as abundant microhemorrhages and widely disseminated bacterial microabscesses throughout the body. Slug expression was detected in diverse subsets of hematopoietic progenitors, but not in more differentiated B and T lymphoid cells, and there was a significant increase in apoptotic (TUNEL-positive) bone marrow progenitor cells in irradiated Slug(-/-) mice compared to wild-type controls. These results implicate Slug in a novel survival pathway that protects hematopoietic progenitors from apoptosis after DNA damage.

Haploinsufficiency of the lysosomal sialidase NEU1 results in a model of pleomorphic rhabdomyosarcoma in mice.

Rhabdomyosarcoma, the most common pediatric sarcoma, has no effective treatment for the pleomorphic subtype. Still, what triggers transformation into this aggressive phenotype remains poorly understood. Here we used Ptch1+/-/ETV7TG/+/- mice with enhanced incidence of rhabdomyosarcoma to generate a model of pleomorphic rhabdomyosarcoma driven by haploinsufficiency of the lysosomal sialidase neuraminidase 1. These tumors share mostly features of embryonal and some of alveolar rhabdomyosarcoma. Mechanistically, we show that the transforming pathway is increased lysosomal exocytosis downstream of reduced neuraminidase 1, exemplified by the redistribution of the lysosomal associated membrane protein 1 at the plasma membrane of tumor and stromal cells. Here we exploit this unique feature for single cell analysis and define heterogeneous populations of exocytic, only partially differentiated cells that force tumors to pleomorphism and promote a fibrotic microenvironment. These data together with the identification of an adipogenic signature shared by human rhabdomyosarcoma, and likely fueling the tumor's metabolism, make this model of pleomorphic rhabdomyosarcoma ideal for diagnostic and therapeutic studies.

Targeting KDM4 for treating PAX3-FOXO1-driven alveolar rhabdomyosarcoma.

Chimeric transcription factors drive lineage-specific oncogenesis but are notoriously difficult to target. Alveolar rhabdomyosarcoma (RMS) is an aggressive childhood soft tissue sarcoma transformed by the pathognomonic Paired Box 3-Forkhead Box O1 (PAX3-FOXO1) fusion protein, which governs a core regulatory circuitry transcription factor network. Here, we show that the histone lysine demethylase 4B (KDM4B) is a therapeutic vulnerability for PAX3-FOXO1+ RMS. Genetic and pharmacologic inhibition of KDM4B substantially delayed tumor growth. Suppression of KDM4 proteins inhibited the expression of core oncogenic transcription factors and caused epigenetic alterations of PAX3-FOXO1-governed superenhancers. Combining KDM4 inhibition with cytotoxic chemotherapy led to tumor regression in preclinical PAX3-FOXO1+ RMS subcutaneous xenograft models. In summary, we identified a targetable mechanism required for maintenance of the PAX3-FOXO1-related transcription factor network, which may translate to a therapeutic approach for fusion-positive RMS.

IRIZIO: a novel gene cooperating with PAX3-FOXO1 in alveolar rhabdomyosarcoma (ARMS).

Rhabdomyosarcoma (RMS) is the most common soft-tissue sarcoma in children with an annual incidence of five new cases per million. Alveolar rhabdomyosarcoma (ARMS) is characterized by the t(2;13) or t(1;13) chromosomal translocations, which generate the PAX3-FOXO1 or PAX7-FOXO1 fusion genes, respectively. The oncogenic activity of PAX3-FOXO1 has been demonstrated in vitro and in vivo, yet expression of the fusion protein alone in primary myoblasts or a mouse model is insufficient for tumorigenic transformation. To identify genes cooperating with PAX3-FOXO1 in ARMS tumorigenesis, we generated a retroviral complementary DNA (cDNA) expression library from the Rh30 ARMS cell line. Arf-/- myoblasts expressing PAX3-FOXO1 and the retroviral cDNA library rapidly formed tumors after subcutaneous injection into NOD-SCID mice. Tumors formed by Arf-/-/PAX3-FOXO1/MarX-library myoblasts contained an unknown cDNA, encoding the C-terminus of the Homo sapiens hypothetical protein, FLJ10404, herein named IRIZIO. Expression of full length IRIZIO cDNA also cooperated with PAX3-FOXO1 in the transformation of Arf-/- myoblasts. Given that IRIZIO is expressed at increased levels in RMS, it might contribute to rhabdomyosarcomagenesis in humans.

Reintroduction of CEBPA in MN1-overexpressing hematopoietic cells prevents their hyperproliferation and restores myeloid differentiation.

Forced expression of MN1 in primitive mouse hematopoietic cells causes acute myeloid leukemia and impairs all-trans retinoic acid-induced granulocytic differentiation. Here, we studied the effects of MN1 on myeloid differentiation and proliferation using primary human CD34(+) hematopoietic cells, lineage-depleted mouse bone marrow cells, and bipotential (granulocytic/monocytic) human acute myeloid leukemia cell lines. We show that exogenous MN1 stimulated the growth of CD34(+) cells, which was accompanied by enhanced survival and increased cell cycle traverse in cultures supporting progenitor cell growth. Forced MN1 expression impaired both granulocytic and monocytic differentiation in vitro in primary hematopoietic cells and acute myeloid leukemia cell lines. Endogenous MN1 expression was higher in human CD34(+) cells compared with both primary and in vitro-differentiated monocytes and granulocytes. Microarray and real-time reverse-transcribed polymerase chain reaction analysis of MN1-overexpressing CD34(+) cells showed down-regulation of CEBPA and its downstream target genes. Reintroduction of conditional and constitutive CEBPA overcame the effects of MN1 on myeloid differentiation and inhibited MN1-induced proliferation in vitro. These results indicate that down-regulation of CEBPA activity contributes to MN1-modulated proliferation and impaired myeloid differentiation of hematopoietic cells.

Lysosomes and Cancer Progression: A Malignant Liaison.

During primary tumorigenesis isolated cancer cells may undergo genetic or epigenetic changes that render them responsive to additional intrinsic or extrinsic cues, so that they enter a transitional state and eventually acquire an aggressive, metastatic phenotype. Among these changes is the alteration of the cell metabolic/catabolic machinery that creates the most permissive conditions for invasion, dissemination, and survival. The lysosomal system has emerged as a crucial player in this malignant transformation, making this system a potential therapeutic target in cancer. By virtue of their ubiquitous distribution in mammalian cells, their multifaced activities that control catabolic and anabolic processes, and their interplay with other organelles and the plasma membrane (PM), lysosomes function as platforms for inter- and intracellular communication. This is due to their capacity to adapt and sense nutrient availability, to spatially segregate specific functions depending on their position, to fuse with other compartments and with the PM, and to engage in membrane contact sites (MCS) with other organelles. Here we review the latest advances in our understanding of the role of the lysosomal system in cancer progression. We focus on how changes in lysosomal nutrient sensing, as well as lysosomal positioning, exocytosis, and fusion perturb the communication between tumor cells themselves and between tumor cells and their microenvironment. Finally, we describe the potential impact of MCS between lysosomes and other organelles in propelling cancer growth and spread.

FOXO1a acts as a selective tumor suppressor in alveolar rhabdomyosarcoma.

Rhabdomyosarcoma (RMS), the most common pediatric soft-tissue sarcoma, has two major histological subtypes: embryonal RMS (ERMS), which has a favorable prognosis, and alveolar RMS (ARMS), which has a poor outcome. Although both forms of RMS express muscle cell-specific markers, only ARMS cells express PAX3-FOXO1a or PAX7-FOXO1a chimeric proteins. In mice, Pax3 and Pax7 play key roles in muscle cell development and differentiation, and FoxO1a regulates myoblast differentiation and fusion; thus, the aberrant regulation of these proteins may contribute to the development of ARMS. In this paper, we report that FOXO1a is not expressed in primary ARMS tumors or ARMS-derived tumor cell lines and that restoration of FOXO1a expression in ARMS cells is sufficient to induce cell cycle arrest and apoptosis. Strikingly, the effects of FOXO1a are selective, as enforced expression of FOXO1a in ERMS-derived tumor cell lines had no effect. Furthermore, FOXO1a induced apoptosis in ARMS by directly activating the transcription of caspase-3. We conclude that FOXO1a is a potent and specific tumor suppressor in ARMS, suggesting that agents that restore or augment FOXO1a activity may be effective as ARMS therapeutics.

MYC competes with MiT/TFE in regulating lysosomal biogenesis and autophagy through an epigenetic rheostat.

Coordinated regulation of the lysosomal and autophagic systems ensures basal catabolism and normal cell physiology, and failure of either system causes disease. Here we describe an epigenetic rheostat orchestrated by c-MYC and histone deacetylases that inhibits lysosomal and autophagic biogenesis by concomitantly repressing the expression of the transcription factors MiT/TFE and FOXH1, and that of lysosomal and autophagy genes. Inhibition of histone deacetylases abates c-MYC binding to the promoters of lysosomal and autophagy genes, granting promoter occupancy to the MiT/TFE members, TFEB and TFE3, and/or the autophagy regulator FOXH1. In pluripotent stem cells and cancer, suppression of lysosomal and autophagic function is directly downstream of c-MYC overexpression and may represent a hallmark of malignant transformation. We propose that, by determining the fate of these catabolic systems, this hierarchical switch regulates the adaptive response of cells to pathological and physiological cues that could be exploited therapeutically.

MN1 affects expression of genes involved in hematopoiesis and can enhance as well as inhibit RAR/RXR-induced gene expression.

The oncoprotein meningioma 1 (MN1) is overexpressed in several subtypes of acute myeloid leukemia (AML) and overexpression was associated with a poor response to chemotherapy. MN1 is a cofactor of retinoic acid receptor/retinoic x receptor (RAR/RXR)-mediated transcription and this study identified genes in the promonocytic cell line U937 that were regulated by MN1. We found that MN1 can both stimulate and inhibit transcription. Combining MN1 expression with all-trans retinoic acid (ATRA), the ligand of the RAR/RXR dimer, showed that MN1 could both enhance and repress ATRA effects. Many of the identified genes are key players in hematopoiesis and leukemogenesis (e.g. MEIS1 and BMI1). Another interesting target is DHRS9. DHRS9 is involved in the synthesis of ATRA from vitamin A. MN1 inhibited DHRS9 expression and completely abolished its induction by ATRA. MN1 is also the target of a rare AML-causing translocation encoding the MN1-TEL protein. MN1-TEL induces expression of only a few genes and its most pronounced effect is inhibition of a large group of ATRA-induced genes including DHRS9. In conclusion, both MN1 and MN1-TEL interfere with the ATRA pathway and this might explain the differentiation block in leukemias in which these genes are involved.

FoxO1a-cyclic GMP-dependent kinase I interactions orchestrate myoblast fusion.

The regulatory circuits that orchestrate mammalian myoblast cell fusion during myogenesis are poorly understood. The transcriptional activity of FoxO1a directly regulates this process, yet the molecular mechanisms governing FoxO1a activity during muscle cell differentiation remain unknown. Here we show an autoregulatory loop in which FoxO1a directly activates transcription of the cyclic GMP-dependent protein kinase I (cGKI) gene and where the ensuing cGKI activity phosphorylates FoxO1a and abolishes its DNA binding activity. These findings establish the FoxO1a-to-cGKI pathway as a novel feedback loop that allows the precise tuning of myoblast fusion. Interestingly, this pathway appears to operate independently of muscle cell differentiation programs directed by myogenic transcription factors.

The novel ETS factor TEL2 cooperates with Myc in B lymphomagenesis.

The human ETS family gene TEL2/ETV7 is highly homologous to TEL1/ETV6, a frequent target of chromosome translocations in human leukemia and specific solid tumors. Here we report that TEL2 augments the proliferation and survival of normal mouse B cells and dramatically accelerates lymphoma development in Emu-Myc transgenic mice. Nonetheless, inactivation of the p53 pathway was a hallmark of all TEL2/Emu-Myc lymphomas, indicating that TEL2 expression alone is insufficient to bypass this apoptotic checkpoint. Although TEL2 is infrequently up-regulated in human sporadic Burkitt's lymphoma, analysis of pediatric B-cell acute lymphocytic leukemia (B-ALL) samples showed increased coexpression of TEL2 and MYC and/or MYCN in over one-third of B-ALL patients. Therefore, TEL2 and MYC also appear to cooperate in provoking a cadre of human B-cell malignancies.

ETV7 is an essential component of a rapamycin-insensitive mTOR complex in cancer.

The mechanistic target of rapamycin (mTOR) serine/threonine kinase, a critical regulator of cell proliferation, is frequently deregulated in human cancer. Although rapamycin inhibits the two canonical mTOR complexes, mTORC1 and mTORC2, it often shows minimal benefit as an anticancer drug. This is caused by rapamycin resistance of many different tumors, and we show that a third mTOR complex, mTORC3, contributes to this resistance. The ETS (E26 transformation-specific) transcription factor ETV7 interacts with mTOR in the cytoplasm and assembles mTORC3, which is independent of ETV7's transcriptional activity. This complex exhibits bimodal mTORC1/2 activity but is devoid of crucial mTORC1/2 components. Many human cancers activate mTORC3 at considerable frequency, and tumor cell lines that lose mTORC3 expression become rapamycin-sensitive. We show mTORC3's tumorigenicity in a rhabdomyosarcoma mouse model in which transgenic ETV7 expression accelerates tumor onset and promotes tumor penetrance. Discovery of mTORC3 represents an mTOR paradigm shift and identifies a novel target for anticancer drug development.

The MN1 oncoprotein activates transcription of the IGFBP5 promoter through a CACCC-rich consensus sequence.

The IGF-binding protein (IGFBP) family consists of six proteins that are expressed and secreted in different tissues. The proteins are regulators of physiological processes throughout the body by modulating the activity of IGF-I and IGF-II. In this article, we describe the coordinated expression of IGFBP5 and MN1 in meningiomas. MN1 is a transcriptional co-activator and we show that MN1 stimulates the IGFBP5 promoter in Hep3B cells. A CACCC-containing sequence, located 140 bp upstream of the transcription start site of the promoter, is required for MN1 action. This sequence matches with the CACCCAC consensus sequence that was selected in an oligonucleotide selection assay performed for MN1. The CACCC element has also been shown to be important for induction of the IGFBP5 promoter by retinoic acid (RA) and progesterone (Pg). We were unable to confirm the effect of Pg on the promoter in Hep3B and U2-osteosarcoma cells regardless of the presence of MN1. On the other hand, we show that induction of the promoter by RA depends on co-expressed MN1 in Hep3B cells. MN1TEL, a leukemia-related fusion protein containing parts of the MN1 and TEL (ETV6) genes, is capable of stimulating the IGFBP5 promoter but is unable to cooperate with RA in Hep3B cells. This suggests that the effects of RA can be negatively affected in leukemias caused by MN1TEL.

Pax3-FKHR knock-in mice show developmental aberrations but do not develop tumors.

Alveolar rhabdomyosarcoma is a pediatric disease specified by the recurrent chromosome translocations t(2;13) and t(1;13). These translocations result in the formation of the PAX3-FKHR and PAX7-FKHR fusion genes, which are thought to play a causal role in the genesis of this disease. Although PAX3-FKHR exhibits transforming activity in immortalized fibroblast cell lines, a direct role of this fusion protein in tumorigenesis in vivo has not been shown. We determined whether expression of Pax3-FKHR in the mouse germ line would render these animals prone to the development of rhabdomyosarcomas. By targeting FKHR cDNA sequences into the Pax3 locus of embryonic stem cells, we used these cells to generate mice carrying a Pax3-FKHR knock-in allele. Despite low expression of the knock-in allele, heterozygous offspring of Pax3-FKHR chimeric mice showed developmental abnormalities. These included intraventricular septum defects, tricuspid valve insufficiency, and diaphragm defects, which caused congestive heart failure leading to perinatal death. In addition, Pax3-FKHR heterozygous offspring displayed malformations of some but not all hypaxial muscles. However, neither newborn heterozygous pups nor their chimeric parents showed any signs of malignancy. We conclude that the Pax3-FKHR allele causes lethal developmental defects in knock-in mice but might be insufficient to cause muscle tumors.