Repression and 3D-restructuring resolves regulatory conflicts in evolutionarily rearranged genomes

Regulatory landscapes drive complex developmental gene expression but it remains unclear how their integrity is maintained when incorporating novel genes and functions during evolution. Here, we investigated how a placental mammal-specific gene, Zfp42, emerged in an ancient vertebrate topologically-associated domain (TAD) without adopting or disrupting the conserved expression of its gene, Fat1. In ESCs, physical TAD-partitioning separates Zfp42 and Fat1 with distinct local enhancers that drive their independent expression. This separation is driven by chromatin activity and not CTCF/cohesin. In contrast, in embryonic limbs, inactive Zfp42 shares Fat1’s intact TAD without responding to active Fat1 enhancers. However, neither Fat1 enhancer-incompatibility nor nuclear envelope-attachment account for Zfp42’s unresponsiveness. Rather, Zfp42’s promoter is rendered inert to enhancers by context-dependent DNA methylation. Thus, diverse mechanisms enabled the integration of independent Zfp42 regulation in the Fat1 locus. Critically, such regulatory complexity appears common in evolution as, genome-wide, most TADs contain multiple independently-expressed genes.