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RAIG1, 2, and 3 and GPCR5d represent a new subfamily of orphan G protein-coupled receptors. RAIG1 is expressed abundantly and specifically in the lung during development and in adult mice. During lung development, RAIG1 expression is initiated at E14.5 and gradually increases, reaching its highest levels at E18. High levels of expression are maintained in adult lungs. Given its abundant lung-specific expression and role in retinoic acid signaling, we hypothesized that RAIG1 plays a role in epithelial cell differentiation during lung development. To determine RAIG1 function and track endogenous RAIG1 spatial expression, a null allele of Raig1 was generated and the lacZ gene was “knocked-in.” Although expression was detected in both proximal and distal epithelium during embryogenesis, it became restricted to type I and type II pneumocytes and the most distal bronchiolar cells in postnatal lungs. This is the first gene known to have this unique epithelial cell expression pattern. Despite this high level of expression, targeted inactivation of Raig1 did not cause significant developmental defects. Epithelial cell differentiation was normal and lung structure was intact. Analysis of other family members demonstrated some overlapping embryonic expression of RAIG3 mRNA that could have led to functional redundancy in the single RAIG1 null mutant mouse.