The Notch locus of Drosophila melanogaster encodes a 2,703-amino-acid transmembrane protein required for a variety of developmental processes, including neurogenesis, oogenesis and ommatidial assembly. The Notch protein contains a large extracellular domain of 36 epidermal growth factor-like repeats as well as three Notch/Lin-12 repeats and an intracellular domain with 6 Cdc10/ankyrin repeats, motifs that are highly conserved in several vertebrate Notch homologues. Truncation of the extracellular domain of the Drosophila Notch protein produces an activated receptor, as judged by its ability to cause phenotypes similar to gain-of-function alleles of duplications of the Notch locus. Equivalent truncations of vertebrate Notch-related proteins have been associated with malignant neoplasma and other developmental abnormalities. We present here an analysis of activated Notch function at single-cell resolution in the Drosophila compound eye. We find that overexpression of full-length Notch in defined cell types has no apparent effects but that overexpression of activated Notch in the same cells transiently blocks their proper cell-fate commitment, causing them either to adopt incorrect cell fates or to differentiate incompletely. Moreover, an activated Notch protein lacking the transmembrane domain is translocated to the nucleus, raising the possibility that Notch may participate directly in nuclear events.