Notch pathway signaling plays a fundamental role in normal biological processes and is frequently deregulated in many cancers. Although several hypotheses regarding cancer subpopulations most likely to respond to therapies targeting the Notch pathway have been proposed, clinical utility of these predictive markers has not been shown. To understand the molecular basis of γ-secretase inhibitor (GSI) sensitivity in breast cancer, we undertook an unbiased, de novo responder identification study using a novel genetically engineered in vivo breast cancer model. We show that tumors arising from this model are heterogeneous on the levels of gene expression, histopathology, growth rate, expression of Notch pathway markers, and response to GSI treatment. In addition, GSI treatment of this model was associated with inhibition of Hes1 and proliferation markers, indicating that GSI treatment inhibits Notch signaling. We then identified a pretreatment gene expression signature comprising 768 genes that is significantly associated with in vivo GSI efficacy across 99 tumor lines. Pathway analysis showed that the GSI responder signature is enriched for Notch pathway components and inflammation/immune-related genes. These data show the power of this novel in vivo model system for the discovery of biomarkers predictive of response to targeted therapies, and provide a basis for the identification of human breast cancers most likely to be sensitive to GSI treatment. [Cancer Res 2009;69(23):8949–57]