Notch signaling plays a fundamental role in determining the outcome of differentiation processes in many tissues. Notch signaling has been implicated in T versus B cell lineage commitment, thymic differentiation, and bone marrow hematopoietic precursor renewal and differentiation. Notch receptors and their ligands are also expressed on the surface of mature lymphocytes and APCs, but the effects of Notch signaling in the peripheral immune system remain poorly defined. The aim of the studies reported here was to investigate the effects of signaling through the Notch receptor using a ligand of the Delta-like family. We show that Notch ligation in the mature immune system markedly decreases responses to transplantation antigens. Constitutive expression of Delta-like 1 on alloantigen-bearing cells renders them nonimmunogenic and able to induce specific unresponsiveness to a challenge with the same alloantigen, even in the form of a cardiac allograft. These effects could be reversed by depletion of CD8+ cells at the time of transplantation. Ligation of Notch on splenic CD8+ cells results in a dramatic decrease in IFN-gamma with a concomitant enhancement of IL-10 production, suggesting that Notch signaling can alter the differentiation potential of CD8+ cells. These data implicate Notch signaling in regulation of peripheral immunity and suggest a novel approach for manipulating deleterious immune responses.