The hope of developing new transplantation therapies for degenerative diseases is limited by inefficient stem cell growth and immunological incompatibility with the host. Here we show that Notch receptor activation induces the expression of the specific target genes hairy and enhancer of split 3 (Hes3) and Sonic hedgehog (Shh) through rapid activation of cytoplasmic signals, including the serine/threonine kinase Akt, the transcription factor STAT3 and mammalian target of rapamycin, and thereby promotes the survival of neural stem cells. In both murine somatic and human embryonic stem cells, these positive signals are opposed by a control mechanism that involves the p38 mitogen-activated protein kinase. Transient administration of Notch ligands to the brain of adult rats increases the numbers of newly generated precursor cells and improves motor skills after ischaemic injury. These data indicate that stem cell expansion in vitro and in vivo, two central goals of regenerative medicine, may be achieved by Notch ligands through a pathway that is fundamental to development and cancer.