In the developing nervous system, differentiating neurons express Delta and activate Notch signaling in their neighboring cells. As a result of Notch activation, neuronal differentiation is inhibited in neighboring cells and they remain neural progenitor cells. Thus, differentiation of neurons and maintenance of neural progenitor cells are well balanced owing to Notch signaling. Recent studies revealed that Notch signaling is under the control of more complex and dynamic regulation than previously thought, such as cell cycle dependent activation and oscillating gene expression. We discuss here recent advances in understanding how Notch signaling is regulated in the developing nervous system and what outcome each type of regulation of Notch signaling leads to. We highlight the role of Notch signaling in proliferation and differentiation of neural progenitor cells.