Abstract Jagged1, a Notch ligand, and Notch have been implicated in Th2 differentiation, but their role in initiating IL-4 production and Th2 differentiation in vivo and the development of allergic airway responses has not been defined. In this study, we show that Jagged1 is up-regulated on bone marrow-derived dendritic cells (BMDCs) pulsed with allergen and that the transfer of these BMDCs before allergen challenge induces airway hyperresponsiveness (AHR) and eosinophilic airway inflammation. Treatment of CD4+ T cells with a γ-secretase inhibitor (GSI), which inhibits Notch signaling, resulted in decreased cytokine production when the cells were cocultured with allergen-pulsed, Jagged1-expressing BMDCs and, after the transfer of allergen-pulsed BMDCs, IL-4-deficient (IL-4−/−) recipients of GSI-treated naive CD4+ T cells developed lower levels of AHR, reduced numbers of eosinophils, and lower Th2 cytokine levels when challenged with allergen. In vivo treatment of wild-type mice with Jagged1-Fc enhanced AHR and airway inflammation, whereas the transfer of BMDC transfected with Jagged1 small interfering RNA (siRNA) cells into WT or IL-4−/− mice before transfer of CD4+ T cells resulted in decreased AHR, inflammation, and Th2 cytokines, indicating the critical role for Jagged1 expression on APCs. These data identify the essential role of the interactions between Notch on CD4+ T cells and Jagged1 on APCs in the initiation of IL-4 production and Th2 differentiation for the development of AHR and allergic airway inflammation.