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The symbiotic microbiota profoundly affect many aspects of host physiology; however, the molecular mechanisms underlying host-microbe cross-talk are largely unknown. Here, we show that the pyrroloquinoline quinone–dependent alcohol dehydrogenase (PQQ-ADH) activity of a commensal bacterium, Acetobacter pomorum, modulates insulin/insulin-like growth factor signaling (IIS) in Drosophila to regulate host homeostatic programs controlling developmental rate, body size, energy metabolism, and intestinal stem cell activity. Germ-free animals monoassociated with PQQ-ADH mutant bacteria displayed severe deregulation of developmental and metabolic homeostasis. Importantly, these defects were reversed by enhancing host IIS or by supplementing the diet with acetic acid, the metabolic product of PQQ-ADH.