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Summary: Mechanisms underpinning airway epithelial homeostatic maintenance and ways to prevent its dysregulation remain elusive. Herein, we identify that β-catenin phosphorylated at Y489 (p-β-cateninY489) emerges during human squamous lung cancer progression. This led us to develop a model of airway basal stem cell (ABSC) hyperproliferation by driving Wnt/β-catenin signaling, resulting in a morphology that resembles premalignant lesions and loss of ciliated cell differentiation. To identify small molecules that could reverse this process, we performed a high-throughput drug screen for inhibitors of Wnt/β-catenin signaling. Our studies unveil Wnt inhibitor compound 1 (WIC1), which suppresses T-cell factor/lymphoid enhancer-binding factor (TCF/LEF) activity, reduces ABSC proliferation, induces ciliated cell differentiation, and decreases nuclear p-β-cateninY489. Collectively, our work elucidates a dysregulated Wnt/p-β-cateninY489 axis in lung premalignancy that can be modeled in vitro and identifies a Wnt/β-catenin inhibitor that promotes airway homeostasis. WIC1 may therefore serve as a tool compound in regenerative medicine studies with implications for restoring normal airway homeostasis after injury. : Aros et al. unveil a dysregulated Wnt/β-catenin signaling axis in lung premalignancy that can be modeled in vitro. They leverage this knowledge to conduct a drug screen and identify a small-molecule inhibitor of Wnt/β-catenin signaling that restores airway epithelial homeostasis. Keywords: homeostasis, drug screen, Wnt, beta-catenin, lung, premalignancy, airway stem cell