Local DNA compaction creates TF-DNA clusters that enable transcription

Transcription factor (TF) clusters have been suggested to facilitate transcription. The mechanisms driving the formation of TF clusters and their impact on transcription, however, remain largely unclear. This is mostly due to the lack of a tractable system. Here, we exploit the transcriptional activation of mir430 in zebrafish embryos to simultaneously follow the dynamic formation of a large Nanog cluster, the underlying DNA, and transcription output by live imaging at high temporal and spatial resolution. We find that the formation of a Nanog cluster that can support transcription requires local DNA compaction. This brings more Nanog-binding sites into the cluster, and therefore more Nanog. Importantly, we find that Nanog stabilizes this TF-DNA cluster, which emphasizes the interdependent relationship between TFs and DNA dynamics in cluster formation. Once the Nanog-DNA cluster at the mir430 locus reaches a maximum amount of Nanog, transcription begins. This maximum is a locus-intrinsic feature, which shows that the locus self-regulates the recruitment of an optimal amount of Nanog. Our study supports a model in which endogenous TF clusters positively impact transcription and form through a combination of DNA binding and local DNA compaction.