The Notch family of transmembrane receptor proteins mediate developmental cell-fate decisions, and mutations in mammalian Notch genes have been implicated in leukaemia, breast cancer, stroke and dementia. During wing development in Drosophila, the Notch receptor is activated along the border between dorsal and ventral cells, leading to the specification of specialized cells that express Wingless (Wg) and organize wing growth and patterning. Three genes, fringe (fng), Serrate (Ser) and Delta (Dl), are involved in the cellular interactions leading to Notch activation. Ser and Dl encode transmembrane ligands for Notch, whereas fng encodes a pioneer protein. We have investigated the relationship between these genes by a combination of expression and coexpression studies in the Drosophila wing. We found that Ser and Dl maintain each other's expression by a positive feedback loop. fng is expressed specifically by dorsal cells and functions to position and restrict this feedback loop to the developing dorsal-ventral boundary. This is achieved by fng through a cell-autonomous mechanism that inhibits a cell's ability to respond to Serrate protein and potentiates its ability to respond to Delta protein.