Notch (N) signaling is an evolutionarily conserved mechanism that regulates many cell-fate decisions. deltex (dx) encodes an E3-ubiquitin ligase that binds to the intracellular domain of N and positively regulates N signaling. However, the precise mechanism of Dx action is unknown. Here, we found that Dx was required and sufficient to activate the expression of gene targets of the canonical Su(H)-dependent N signaling pathway. Although Dx required N and a cis-acting element that overlaps with the Su(H)-binding site, Dx activated a target enhancer of N signaling, the dorsoventral compartment boundary enhancer of vestigial (vgBE), in a manner that was independent of the Delta (Dl)/Serrate (Ser) ligands- or Su(H). Dx caused N to be moved from the apical cell surface into the late-endosome, where it accumulated stably and co-localized with Dx. Consistent with this, the dx gene was required for the presence of N in the endocytic vesicles. Finally, blocking the N transportation from the plasma membrane to the late-endosome by a dominant-negative form of Rab5 inhibited the Dx-mediated activation of N signaling, suggesting that the accumulation of N in the late-endosome was required for the Dx-mediated Su(H)-independent N signaling.