m5C methylated lncRncr3–MeCP2 interaction restricts miR124a-initiated neurogenesis

Coordination of neuronal differentiation with expansion of the neuroepithelial/neural progenitor cell (NEPC/NPC) pool is essential in early brain development. Our in vitro and in vivo studies identify independent and opposing roles for two neural-specific and differentially expressed non-coding RNAs derived from the same locus: the evolutionarily conserved lncRNA Rncr3 and the embedded microRNA miR124a-1. Rncr3 regulates NEPC/NPC proliferation and controls the biogenesis of miR124a, which determines neuronal differentiation. Rncr3 conserved exons 2/3 are cytosine methylated and bound by methyl-CpG binding protein MeCP2, which restricts expression of miR124a embedded in exon 4 to prevent premature neuronal differentiation, and to orchestrate proper brain growth. MeCP2 directly binds cytosine-methylated Rncr3 through previously unrecognized lysine residues and suppresses miR124a processing by recruiting PTBP1 to block access of DROSHA-DGCR8. Thus, miRNA processing is controlled by lncRNA m5C methylation along with the defined m5C epitranscriptomic RNA reader protein MeCP2 to coordinate brain development.