Cancer development results from deregulated control of stem cell populations and alterations in their surrounding environment. Notch signaling is an important form of direct cell–cell communication involved in cell fate determination, stem cell potential and lineage commitment. The biological function of this pathway is critically context dependent. Here we review the pro-differentiation role and tumor suppressing function of this pathway, as revealed by loss-of-function in keratinocytes and skin, downstream of p53 and in cross-connection with other determinants of stem cell potential and/or tumor formation, such as p63 and Rho/CDC42 effectors. The possibility that Notch signaling elicits a duality of signals, involved in growth/differentiation control and cell survival will be discussed, in the context of novel approaches for cancer therapy.