BACKGROUND AND AIMS: Activation of the oval cell compartment occurs in the liver when hepatocytes are functionally compromised and/or unable to divide. Our goal was to investigate the systemic signals responsible for determining the efficiency of oval cell-mediated liver regeneration, focusing on the Notch signaling cascade. METHODS: The established oval cell induction protocol of 2-acetylaminofluorine (2-AAF) implantation followed by 70% surgical resection of the liver (partial hepatectomy, PH) was employed in a rat model. This oval cell induction model was further combined with injections of a γ-secretase inhibitor (GSI XX) to examine the effects of Notch inhibition on oval cell-aided regeneration of the liver. RESULTS: Notch signaling was found to be upregulated at the peak of oval cell induction during 2AAF-PH alone. Treatment with GSI XX led to interruption of the Notch signal, as shown by a decrease in expression of Hes1. While there was a robust oval cell response seen at day 11 post-PH, there was a measurable delay in differentiation when Notch was inhibited. This was confirmed morphologically as well as by immunohistochemistry for the oval cell markers, α-fetoprotein, OV-6, and CK19. The hepatocytes seen at day 22 demonstrated an enhanced hepatocellular mitoinhibition index (p21(Waf1)/Ki67), suggestive of dysregulated proliferation and cell cycle progression. Moreover, these hepatocytes exhibited decreased expression of hepatocyte functional markers, such as cytochrome P450 and glucose-6-phosphatase-α. CONCLUSIONS: Taken together, these results identify the Notch signaling pathway as a potent regulator of differentiation and proliferation in oval cells, which is necessary for functional for repair of the liver by oval cells.