Notch signaling plays various key roles in cell fate determination during CNS development in a context-dependent fashion. However, its precise physiological role and the localization of its target cells remain unclear. To address this issue, we developed a new reporter system for assessing the RBP-J-mediated activation of Notch signaling target genes in living cells and tissues using a fluorescent protein Venus. Our reporter system revealed that Notch signaling is selectively activated in neurosphere-initiating multipotent neural stem cells in vitro and in radial glia in the embryonic forebrain in vivo. Furthermore, the activation of Notch signaling occurs during gliogenesis and is required in the early stage of astroglial development. Consistent with these findings, the persistent activation of Notch signaling inhibits the differentiation of GFAP-positive astrocytes. Thus, the development of our RBP-J-dependent live reporter system, which is activated upon Notch activation, together with a stage-dependent gain-of-function analysis allowed us to gain further insight into the complexity of Notch signaling in mammalian CNS development.