Cell-cell interactions mediated by Notch are critical at multiple stages of development. Our current understanding of the Notch signalling pathway suggests a comparatively simple transduction mechanism. However, this core pathway can be deployed in three different types of developmental process: lateral inhibition, lineage decisions and boundary formation. These illustrate how the activity of the pathway can be modulated both at the cell surface, through availability and effectiveness of ligand interactions, and inside the cell, through effects on the transduction pathway and the responsiveness of target genes.