Dynamic DNA methylation turnover at the exit of pluripotency epigenetically primes gene regulatory elements for hematopoietic lineage specification

Epigenetic mechanisms govern developmental cell fate decisions, but how DNA methylation coordinates with chromatin structure and three-dimensional DNA folding to enact cell-type specific gene expression programmes remains poorly understood. Here, we use mouse embryonic stem and epiblast-like cells deficient for 5-methyl cytosine or its oxidative derivatives (5-hydroxy-, 5-formyl- and 5-carboxy-cytosine) to dissect the gene regulatory mechanisms that control cell lineage specification at the exit of pluripotency. Genetic ablation of either DNA methyltransferase (Dnmt) or Ten-eleven-translocation (Tet) activity yielded largely distinct sets of dysregulated genes, revealing divergent transcriptional defects upon perturbation of individual branches of the DNA cytosine methylation cycle. Unexpectedly, we found that disrupting DNA methylation or oxidation interferes with key enhancer features, including chromatin accessibility, enhancer-characteristic histone modifications, and long-range chromatin interactions with putative target genes. In addition to affecting transcription of select genes in pluripotent stem cells, we observe impaired enhancer priming, including a loss of three-dimensional interactions, at regulatory elements associated with key lineage-specifying genes that are required later in development, as we demonstrate for the key hematopoietic genes Klf1 and Lyl1. Consistently, we observe impaired transcriptional activation of blood genes during embryoid body differentiation of knockout cells. Our findings identify a novel role for the dynamic turnover of DNA methylation at the exit of pluripotency to establish and maintain chromatin states that epigenetically prime enhancers for later activation during developmental cell diversification. HighlightsO_LIWe perform a detailed epigenetic characterisation of the mouse embryonic stem cell (ESC) to epiblast-like cell (EpiLC) transition in wild type, Tet triple-knockout (TKO) and Dnmt TKO lines and develop a novel clustering approach to interrogate the data. C_LIO_LITet TKO reduces H3K4me1 and H3K27ac levels across enhancer elements upon pluripotency exit whilst Dnmt TKO affects only H3K4me1 levels, suggesting a novel role for oxidative derivatives in H3K4me1 deposition. C_LIO_LITet TKO and Dnmt TKO affect enhancer priming in EpiLCs which is associated with failure to upregulate hematopoietic genes upon differentiation. C_LIO_LILong-range chromosomal interactions between primed enhancers and their target genes are weakened in both Dnmt and Tet TKO. C_LI