The Notch protein spans the cell membrane, with part of it inside and part outside. Ligand proteins binding to the extracellular domain induce proteolytic cleavage and release of the intracellular domain, which enters the cell nucleus to modify gene expression.

The cleavage model was first proposed in 1993 based on work done with Drosophila Notch and C. elegans lin-12, informed by the first oncogenic mutation affecting a human Notch gene. Compelling evidence for this model was provided in 1998 by in vivo analysis in Drosophila by Gary Struhl and in cell culture by Raphael Kopan. Although this model was initially disputed, the evidence in favor of the model was irrefutable by 2001.

The receptor is normally triggered via direct cell-to-cell contact, in which the transmembrane proteins of the cells in direct contact form the ligands that bind the notch receptor. The Notch binding allows groups of cells to organize themselves such that, if one cell expresses a given trait, this may be switched off in neighbouring cells by the intercellular notch signal. In this way, groups of cells influence one another to make large structures. Thus, lateral inhibition mechanisms are key to Notch signaling. lin-12 and Notch mediate binary cell fate decisions, and lateral inhibition involves feedback mechanisms to amplify initial differences.

The Notch cascade consists of Notch and Notch ligands, as well as intracellular proteins transmitting the notch signal to the cell's nucleus. The Notch/Lin-12/Glp-1 receptor family was found to be involved in the specification of cell fates during development in Drosophila and C. elegans.

The intracellular domain of Notch forms a complex with CBF1 and Mastermind to activate transcription of target genes. The structure of the complex has been determined.