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