(A) During development, mesenchymal progenitors capable of forming bone, cartilage, muscle, fat, or tendon arise from either neural crest or from mesoderm. Transcriptional programs (shown in italics) that specify mesenchymal cell fates are initiated and modified by paracrine cues provided by TGF-β superfamily members, mediated via regulated assembly of Smad-containing multiprotein transcription factor complexes (8). During somitic mesoderm lamination, the syndetome — demarcated by Scleraxis expression — forms at the interface between the bone-forming sclerotome and muscle-forming myotome to generate tenocytes of axial tendons (3). Similar mechanisms are likely deployed during appendicular tendon formation. Not shown are the influences of paracrine Wnt and FGF signaling cascades and homeodomain proteins of the Pax, Msx, Dlx, and Six families that modulate BMP signaling. The data reported by Hoffmann et al. (5) indicate that activated Smad8 promotes tenocyte differentiation of C3H10T1/2 cells. Whether Smad8 participates in syndetome development is unknown. C/EBP, CCAAT/enhancer binding protein; MRF, muscle regulatory factor; MRTF, myocardin-related transcription factor; SRF, serum response factor. (B) R-Smad and L+MH2 structures. Although the MH1 domain encodes a DNA-binding function, Smad interaction with other transcription factors is required for gene regulation; these interactions are directed by the L+MH2 domain (8). The SxS motif is the cognate for phosphorylation-dependent Smad activation by activin-like kinase receptors. Smad4 and importins mediate nuclear entry. Since the Smad8 L+MH2 fragment lacks intrinsic DNA binding, its tenogenic actions are mediated by regulatory protein-protein interactions.