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Transforming growth factor beta (TGF-β) is a key factor mediating the intercellular crosstalk between the hematopoietic stem cells and their microenvironment. Here, we investigated the skeletal phenotype of transgenic mice expressing constitutively active TGF-β receptor type I under the control of Mx1-Cre (<i>Mx1;TβRI^CA</i> mice). μCT analysis showed decreased cortical thickness, and cancellous bone volume in both femurs and mandibles. Histomorphometric analysis confirmed a decrease in cancellous bone volume due to increased osteoclast number and decreased osteoblast number. Primary osteoblasts showed decreased ALP and mineralization. Constitutive <i>TβRI</i> activation increased osteoclast differentiation. qPCR analysis showed that <i>Tnfsf11/Tnfrsf11b</i> ratio, <i>Ctsk</i>, <i>Sufu</i>, and <i>Csf1</i> were increased whereas <i>Runx2</i>, <i>Ptch1, and Ptch2</i> were decreased in <i>Mx1;TβRI^CA</i> femurs. Interestingly, <i>Gli1, Wnt3a</i>, <i>Sp7, Alpl, Ptch1, Ptch2</i>, and <i>Shh</i> mRNA expression were reduced whereas <i>Tnfsf11/Tnfrsf11b</i> ratio was increased in <i>Mx1;TβRI^CA</i> mandibles. Similarly, osteoclast-related genes were increased in <i>Mx1;TβRI^CA</i> osteoclasts whereas osteoblast-related genes were reduced in <i>Mx1;TβRI^CA</i> osteoblasts. Western blot analysis indicated that SMAD2 and SMAD3 phosphorylation was increased in <i>Mx1;TβRI^CA</i> osteoblasts, and SMAD3 phosphorylation was increased in <i>Mx1;TβRI^CA</i> osteoclasts. CTSK was increased while RUNX2 and PTCH1 was decreased in <i>Mx1;TβRI^CA</i> mice. Microindentation analysis indicated decreased hardness in <i>Mx1;TβRI^CA</i> mice. Our study indicated that <i>Mx1;TβRI^CA</i> mice were osteopenic by increasing osteoclast number and decreasing osteoblast number, possibly by suppressing Hedgehog signaling pathways.