The Drosophila tracheal system consists of a stereotyped network of epithelial tubes formed by several tracheal cell types. By the end of embryogenesis, when the general branching pattern is established, some specialised tracheal cells then mediate branch fusion while others extend fine terminal branches. Here evidence is presented that the Notch signalling pathway acts directly in the tracheal cells to distinguish individual fates within groups of equivalent cells. Notch helps to single out those tracheal cells that mediate branch fusion by blocking their neighbours from adopting the same fate. This function of Notch would require the restricted activation of the pathway in specific cells. In addition, and probably later, Notch also acts in the selection of those tracheal cells that extend the terminal branches. Both the localised expression and the mutant phenotypes of Delta, a known ligand for Notch, suggest that Delta may activate Notch to specify cell fates at the tips of the developing tracheal branches.