The Drosophila ovary provides a model system for studying the mechanisms that regulate the differentiation of somatic stem cells into specific cell types. Ovarian somatic stem cells produce follicle cells, which undergo a binary choice during early differentiation. They can become either epithelial cells that surround the germline to form an egg chamber ('main body cells') or a specialized cell lineage found at the poles of egg chambers. This lineage goes on to make two cell types: polar cells and stalk cells. To better understand how this choice is made, we carried out a screen for genes that affect follicle cell fate specification or differentiation. We identified extra macrochaetae (emc), which encodes a helix-loop-helix protein, as a downstream effector of Notch signaling in the ovary. EMC is expressed in proliferating cells in the germarium, as well as in the main body follicle cells. EMC expression in the main body cells is Notch dependent, and emc mutant cells located on the main body failed to differentiate. EMC expression is reduced in the precursors of the polar and stalk cells, and overexpression of EMC caused dramatic egg chamber fusions, indicating that EMC is a negative regulator of polar and/or stalk cells. EMC and Notch were both required in the main body cells for expression of Eyes Absent (EYA), a negative regulator of polar and stalk cell fate. We propose that EMC functions downstream of Notch and upstream of EYA to regulate main body cell fate specification and differentiation.