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SUMMARY Thyroid hormone (TH) is required for metamorphosis of the long, coiled tadpole gut into the short frog gut. Eleutherodactylus coqui, a direct developing frog, lacks a tadpole. Its embryonic gut is a miniature adult form with a mass of yolky cells, called nutritional endoderm, attached to the small intestine. We tested the TH requirement for gut development in E. coqui. Inhibition of TH synthesis with methimazole arrested gut development in its embryonic form. Embryos treated with methimazole failed to utilize the yolk in their nutritional endoderm, and survived for weeks without further development. Conversely, methimazole and 3,3′,5-tri-iodo-l-thyronine, the active form of TH, stimulated gut development and utilization and disappearance of the nutritional endoderm. In Xenopus laevis, the receptor for TH, TRβ, is upregulated in response to TH. Similarly, EcTRβ, the E. coqui ortholog, was upregulated by TH in the gut. EcTRβ expression was high in the nutritional endoderm, suggesting a direct role for TH in yolk utilization by these cells. An initial step in the breakdown of yolk in X. laevis is acidification of the yolk platelet. E. coqui embryos in methimazole failed to acidify their yolk platelets, but acidification was stimulated by TH indicating its role in an early step of yolk utilization. In addition to a conserved TH role in gut development, a novel regulatory role for TH in yolk utilization has evolved in these direct developers.