Notch receptors are single pass transmembrane receptors activated by membrane-bound ligands with a role in cell proliferation and differentiation. As Notch 1 and 2 mRNAs are expressed by osteoblasts and induced by cortisol, we postulated that Notch could regulate osteoblastogenesis. We investigated the effects of retroviral vectors directing the constitutive expression of the Notch 1 intracellular domain (NotchIC) in murine ST-2 stromal and in MC3T3 cells. NotchIC overexpression was documented by increased Notch 1 transcripts and activity of the Notch-dependent Hairy Enhancer of Split promoter. In the presence of bone morphogenetic protein-2 (BMP-2), ST-2 cells differentiated toward osteoblasts forming mineralized nodules, and Notch 1 opposed this effect and decreased the expression of osteocalcin, type I collagen, and alkaline phosphatase transcripts and Delta2Delta FosB protein. Further, NotchIC decreased Wnt/beta-catenin signaling. As cells differentiated in the presence of BMP-2, they underwent apoptosis, and Notch opposed this event. In the presence of cortisol, NotchIC induced the formation of mature adipocytes and enhanced the effect of cortisol on adipsin, peroxisome proliferator-activated receptor-gamma2 and CCAAT enhancer binding protein alpha and delta mRNA levels. NotchIC also opposed MC3T3 cell differentiation and the expression of a mature osteoblastic phenotype. In conclusion, NotchIC impairs osteoblast differentiation and enhances adipogenesis in stromal cell cultures.