The role of Notch signaling in the maintenance of adult murine prostate epithelial homeostasis remains unclear. We found that Notch ligands are mainly expressed within the basal cell lineage, while active Notch signaling is detected in both the prostate basal and luminal cell lineages. Disrupting the canonical Notch effector Rbp-j impairs the differentiation of prostate basal stem cells and increases their proliferation in vitro and in vivo, but does not affect luminal cell biology. Conversely, ectopic Notch activation in adult prostates results in a decrease in basal cell number and luminal cell hyperproliferation. TGFβ dominates over Notch signaling and overrides Notch ablation-induced proliferation of prostate basal cells. However, Notch confers sensitivity and positive feedback by upregulating a plethora of TGFβ signaling components including TgfβR1. These findings reveal crucial roles of the self-enforced positive reciprocal regulatory loop between TGFβ and Notch in maintaining prostate basal stem cell dormancy.