Notch receptor-mediated cell-cell signaling is known to negatively regulate neurogenesis in both vertebrate and invertebrate species, while being implicated in promoting the acquisition of glial fates. We studied Notch1 function directly during retinal neurogenesis by selective Cre/loxP-triggered Notch1 gene inactivation in peripheral retinal progenitor cells (RPCs) prior to the onset of cell differentiation. Consistent with its previously established role, Notch1 inactivation led to dramatic alteration in the expression profile of multiple basic helix-loop-helix transcription factors, consequently prompting premature cell-cycle exit and neuronal specification. Surprisingly, however, Notch1 inactivation led to a striking change in retinal cell composition, with cone-photoreceptor precursors expanding at the expense of other early- as well as late-born cell fates. Intriguingly, the Notch1-deficient precursors adhered to the normal chronological sequence of the cone-photoreceptor differentiation program. Together, these findings reveal an unexpected role of Notch signaling in directly controlling neuronal cell-type composition, and suggest a model by which, during normal retinogenesis, Notch1 functions to suppress cone-photoreceptor fate, allowing for the specification of the diversity of retinal cell types.