The epidermal growth factor receptor (EGFR) has critical functions in development and in many human cancers. During development, the spatial extent of EGFR signalling is regulated by feedback loops comprising both well-understood activators and less well-characterized inhibitors. In Drosophila melanogaster the secreted protein Argos functions as the only known extracellular inhibitor of EGFR, with clearly identified roles in multiple stages of development. Argos is only expressed when the Drosophila EGFR (DER) is activated at high levels, and downregulates further DER signalling. Although there is ample genetic evidence that Argos inhibits DER activation, the biochemical mechanism has not been established. Here we show that Argos inhibits DER signalling without interacting directly with the receptor, but instead by sequestering the DER-activating ligand Spitz. Argos binds tightly to the EGF motif of Spitz and forms a 1:1 (Spitz:Argos) complex that does not bind DER in vitro or at the cell surface. Our results provide an insight into the mechanism of Argos function, and suggest new strategies for EGFR inhibitor design.
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