BACE1 is a type I transmembrane aspartyl protease that cleaves amyloid precursor protein at the β-secretase site to initiate the release of β-amyloid peptide. As a secretase, BACE1 also cleaves additional membrane-bound molecules by exerting various cellular functions. In this study, we showed that BACE1 can effectively shed the membrane-anchored signaling molecule Jagged 1 (Jag1).Wealso mapped the cleavage sites of Jag1 by ADAM10 and ADAM17. Although Jag1 shares a high degree of homology with Jag2 in the ectodomain region, BACE1 fails to cleave Jag2 effectively, indicating a selective cleavage of Jag1. Abolished cleavage of Jag1 in BACE1-null mice leads to enhanced astrogenesis and, concomitantly, reduced neurogenesis. This characterization provides biochemical evidence that the Jag1-Notch pathway is under the control of BACE1 activity