Previous models for signal transduction via the Notch pathway have depicted the full-length Notch receptor expressed at the cell surface. We present evidence demonstrating that the Notch receptor on the plasma membrane is cleaved. This cleavage is an evolutionarily conserved, general property of Notch and occurs in the trans-Golgi network as the receptor traffics toward the plasma membrane. Although full-length Notch is detectable in the cell, it does not reach the surface. Cleavage results in a C-terminal fragment, N(TM), that appears to be cleaved N-terminal to the transmembrane domain, and an N-terminal fragment, N(EC), that contains most of the extracellular region. We provide evidence that these fragments are tethered together on the plasma membrane by a link that is sensitive to reducing conditions, forming a heterodimeric receptor.