Signal peptide-CUB-EGF domain-containing protein 2 (SCUBE2) belongs to a 
secreted and membrane-tethered multidomain SCUBE protein family composed of 
three members found in vertebrates and mammals. Recent reports suggested that 
zebrafish scube2 could facilitate sonic hedgehog (Shh) signaling for proper 
development of slow muscle. However, whether SCUBE2 can regulate the signaling 
activity of two other hedgehog ligands (Ihh and Dhh), and the developmental 
relevance of the SCUBE2-induced hedgehog signaling in mammals remain poorly 
understood. In this study, we first showed that as compared with SCUBE1 or 
SCUBE3, SCUBE2 is the most potent modulator of IHH signaling in vitro. In 
addition, gain and loss-of-function studies demonstrated that SCUBE2 exerted an 
osteogenic function by enhancing Ihh-stimulated osteoblast differentiation in 
the mouse mesenchymal progenitor cells. Consistent with these in vitro studies 
and the prominent roles of Ihh in coordinating skeletogenesis, genetic ablation 
of Scube2 (-/-) caused defective endochondral bone formation and impaired 
Ihh-mediated chondrocyte differentiation and proliferation as well as osteoblast 
differentiation of -/- bone-marrow mesenchymal stromal-cell cultures. Our data 
demonstrate that Scube2 plays a key regulatory role in Ihh-dependent 
endochondral bone formation.