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Sox2is a transcriptional regulator that is highly expressed in retinal astrocytes, yet its function in these cells has not previously been examined. To understand its role, we conditionally deletedSox2from the population of astrocytes and examined the consequences on retinal development. We found thatSox2deletion does not alter the migration of astrocytes, but it impairs their maturation, evidenced by the delayed upregulation of glial fibrillary acidic protein (GFAP) across the retina. The centro‐peripheral gradient of angiogenesis is also delayed in Sox2‐CKO retinas. In the mature retina, we observed lasting abnormalities in the astrocytic population evidenced by the sporadic loss of GFAP immunoreactivity in the peripheral retina as well as by the aberrant extension of processes into the inner retina. Blood vessels in the adult retina are also under‐developed and show a decrease in the frequency of branch points and in total vessel length. The developmental relationship between maturing astrocytes and angiogenesis suggests a causal relationship between the astrocytic loss ofSox2and the vascular architecture in maturity. We suggest that the delay in astrocytic maturation and vascular invasion may render the retina hypoxic, thereby causing the abnormalities we observe in adulthood. These studies uncover a novel role forSox2in the development of retinal astrocytes and indicate that its removal can lead to lasting changes to retinal homeostasis.