Keratinocyte transglutaminase (TGK) is a membrane-bound phosphoprotein responsible for cross-linked envelope formation during terminal differentiation in epidermal cells. To understand the molecular basis for TGK expression and function during the differentiation program, this proposal investigates the posttranslational modifications to which the enzyme is subject and is transcriptional regulation by effectors in the steroid superfamily (retinoids, T3, glucocorticoids, TCDD). First, features of the amino acid sequence near the amino terminus which influence membrane anchorage will be explored. Mutagenesis of the acylation site, a cluster of 5 Cys residues, will be conducted to determine the importance of its hydrophobicity and the role of individual residues. The minimal TGK sequence capable of inducing anchorage when fused to a freely soluble protein (involucrin) will be determined and, on that basis, peptide substrates and inhibitors of fatty acid transacylase will be designed. In a second line of investigation, Ser residues subject to phorbol ester-stimulated phosphorylation will be identified by (i) using synthetic peptides as protein kinase C substrates and (ii) examining the phosphorylation of site-directed TGK mutants. Further, possible interdependence of fatty acid acylation and phosphorylation will be studied. In addition, the enzymatic basis will be examined for a deficiency in TGK phosphorylation exhibited by an immortalized human epidermal cell line. The final aspect of the proposal investigates the molecular basis for regulation of TGK mRNA levels by retinoids, T3, glucocorticoids and TCDD. Response elements in the 5'- flanking DNA that regulate transcription will be identified by luciferase reporter transfection and by mobility shift experiments. If warranted, transcriptional regulation by receptor level modulation and receptor protein interactions will be explored. The results of this work will provide insight not only into the regulation of keratinocyte differentiation but will also contribute more generally to characterization of protein fatty acid acyltransferases and of a potentially important difference in kinase expression among neoplastic and normal keratinocytes.