The highly-conserved Notch signaling pathway is unique, as both the Notch receptor and most of its respective ligands (canonically the DSL or Delta/Serrate/lag-2 family members) are transmembrane proteins attached to the cell surface. Therefore, Notch signaling is limited to interaction between adjacent cells.
Communication between adjacent cells is paramount, particularly during early development, when cell fate and function are yet to be determined. Notch signaling provides a method for cells to specify their own identity, and to simultaneously influence the role and identity of neighboring cells through lateral inhibition.
The core of the Notch signaling pathway involves two adjacent cells, one expressing a DSL family ligand, and the other expressing the Notch (the receptor). When receptor and ligand interact, two separate protease enzymes cleave Notch into extracellular and cytosolic components. ADAM proteases cleave the extracellular portion of Notch, which remains bound to its respective ligand and is endocytosed by the signaling cell. γ-secretase cleaves the cytosolic portion of notch. This cytosolic region migrates to the nucleus where it binds to the transcription factor CSL, transforming it from a transcriptional repressor to an activator, and upregulating expression of Notch target genes.