Accurate Notch signalling is critical for organism development and homeostasis. Fine-tuning of Notch-ligand interactions have substantial impact on signallingoutputs. Recent structural studies identified a conserved N-terminal C2 domain in human Notch ligands which conferred phospholipid binding in vitro. Here we show that Drosophila ligands Delta and Serrate adopt the same C2 domain structure with analogous variations in the loop regions, including the so-called b1-2 loop that has been associated with phospholipid binding. Mutations in the b 1-2 loop of Delta C2 domain retain Notch binding but have impaired ability to interact with phospholipids in vitro. To investigate its role in vivo we deleted five residues within the b 1-2 loop of endogenous Delta by CRISPR/Cas9 gene editing. Strikingly, this change compromised ligand function. The modified Delta enhanced phenotypes produced by Delta loss of function alleles and suppressed that of Notch alleles. As the modified protein was present on the cell surface in normal amounts, these results argue that C2 domain phospholipid-binding is necessary for robust signalling in vivo where the balance of trans and cis ligand-receptor interactions is finely tuned.
