An intricate interplay of signalling pathways dictates the acquisition of specific cell fates during development. The NOTCH receptor is the central element in a cell-interaction mechanism that controls the fate of a very broad spectrum of precursor cells. Conservation across species implies that signalling through this receptor is a tool frequently used by metazoans to modulate the fate of precursor cells. This article describes recent advances in the genetic and molecular dissection of this developmentally fundamental pathway that have provided new insights into the mechanism by which extracellular signals act through the NOTCH receptor to determine or alter cellular fate.