The Notch signaling pathway plays a crucial role in neurodevelopment and in adult brain homeostasis. We aimed to further investigate Notch pathway activity in bipolar disorder (BD) and schizophrenia (SCZ) by conducting a pathway analysis. We measured plasma levels of Notch ligands (DLL1 and DLK1) using enzyme immunoassays in a large sample of patients (SCZ n = 551, BD n = 246) and healthy controls (HC n = 639). We also determined Notch pathway related gene expression levels by microarray analyses from whole blood in a subsample (SCZ n = 338, BD n = 241 and HC n = 263). We found significantly elevated Notch ligand levels in plasma in both SCZ and BD compared to HC. Significant gene expression findings included increased levels of RFNG and KAT2B (p < 0.001), and decreased levels of PSEN1 and CREBBP in both patient groups (p < 0.001). RBPJ was significantly lower in SCZ vs HC (p < 0.001), and patients using lithium had higher levels of RBPJ (p < 0.001). We provide evidence of altered Notch signaling in both SCZ and BD compared to HC, and suggest that Notch signaling pathway may be disturbed in these disorders. Lithium may ameliorate aberrant Notch signaling. We propose that drugs targeting Notch pathway could be relevant in the treatment of psychotic disorders.