Arteriovenous malformations (AVMs) are high-flow lesions directly connecting arteries and veins. In the brain, AVM rupture can cause seizures, stroke, and death. Patients with AVMs exhibit reduced coverage of the vessels by pericytes, the mural cells of microvascular capillaries; however, the mechanism underlying this pericyte reduction and its association with AVM pathogenesis remains unknown. Notch signaling has been proposed to regulate critical pericyte functions. We hypothesized that Notch signaling in pericytes is crucial to maintain pericyte homeostasis and prevent AVM formation. We inhibited Notch signaling specifically in perivascular cells and analyzed the vasculature of these mice. The retinal vessels of mice with deficient perivascular Notch signaling developed severe AVMs, together with a significant reduction in pericytes and vascular smooth muscle cells (vSMC) in the arteries, while vSMCs were increased in the veins. Vascular malformations and pericyte loss were also observed in the forebrain of embryonic mice deficient for perivascular Notch signaling. Moreover, the loss of Notch signaling in pericytes downregulated Pdgfrb levels and increased pericyte apoptosis, pointing to a critical role for Notch in pericyte survival. Overall, our findings reveal a mechanism of AVM formation and highlight the Notch signaling pathway as an essential mediator in this process.