The signals that maintain the proper balance between adult intestinal cell types are poorly understood. Loss-of-function studies have implicated the Notch pathway in the regulation of intestinal fate during development. However, it is unknown whether Notch has a role in maintaining the balance of different cell types in the adult intestine and whether it acts reversibly. To determine whether Notch has a direct effect on intestinal development and adult intestinal cell turnover, we have used a gain-of-function approach to activate Notch. Ectopic Notch signaling in adult intestinal progenitor cells leads to a bias against secretory fates, whereas ectopic Notch activation in the embryonic foregut results in reversible defects in villus morphogenesis and loss of the proliferative progenitor compartment. We conclude that Notch regulates adult intestinal development by controlling the balance between secretory and absorptive cell types. In the embryo, Notch activation perturbs morphogenesis, possibly through effects on stem or progenitor cells.