Notch signaling is involved in the regulation of many cell fate determination events in both embryonic development and adult tissue homeostasis. We previously demonstrated that Notch1 and Notch2 molecules inhibit myeloid differentiation in a cytokine-specific manner and that the Notch cytokine response domain is necessary for this functional specificity. We have now investigated the putative role of phosphorylation in the activity of Notch in response to cytokine signals. Our results show that the granulocyte colony-stimulating factor (G-CSF) stimulation of 32D cells expressing the intracellular Notch2 protein induces phosphorylation at specific sites of this molecule, rendering the molecule inactive and permitting differentiation of these cells. In contrast, when cells are stimulated with granulocyte macrophage colony-stimulating factor (GM-CSF), intracellular notch2 is not phosphorylated at these residues and differentiation is inhibited. We also show that deletion of the Ser/Thr-rich region between amino acids 2067 and 2099 abrogates G-CSF-induced phosphorylation and results in a molecule that inhibits differentiation in response to either G-CSF or GM-CSF. Our results further indicate that Ser(2078) is a critical residue for phosphorylation and modulation of Notch2 activity in the context of G-CSF-induced differentiation of 32D cells.