A fundamental cell-fate control mechanism regulating multicellular development is defined by the Notch-signalling pathway. Developmental and genetic studies of wild type and activated Notch-receptor expression in diverse organisms suggest that Notch plays a general role in development by governing the ability of undifferentiated precursor cells to respond to specific signals. Notch signalling has been conserved throughout evolution and controls the differentiation of a broad spectrum of cell types during development. Genetic studies in Drosophila have led to the identification of several components of the Notch pathway. Two of the positive regulators of the pathway are encoded by the suppressor of hairless [Su(H)] and deltex (dx) genes. Drosophila dx encodes a ubiquitous, novel cytoplasmic protein of unknown biochemical function. We have cloned a human deltex homologue and characterized it in parallel with its Drosophila counterpart in biochemical assays to assess deltex function. Both human and Drosophila deltex bind to Notch across species and carry putative SH3-binding domains. Using the yeast interaction trap system, we find that Drosophila and human deltex bind to the human SH3-domain containing protein Grb2 (ref. 10). Results from two different reporter assays allow us for the first time to associate deltex with Notch-dependent transcriptional events. We present evidence linking deltex to the modulation of basic helix-loop-helix (bHLH) transcription factor activity.