Notch receptors are key regulators of development by controlling cell-fate determination in many multicellular organisms. Genes that are important for normal differentiation play a role in cancer when their normal functions became dysregulated. Notch signaling has been shown to promote and maintain survival of many types of cancers, and we previously have shown that Notch3 plays an important role in lung cancer. In this study, we showed that a high percentage of lung cancer lines expressed Jagged1, Notch receptors, and their transcriptional target genes (HES1, Hey1), suggesting that the Notch pathway plays an important role in lung cancer biology. Thus, inhibition of Notch receptor activation represents a compelling treatment strategy. Notch activation requires proteolytic cleavage of the receptor by gamma-secretase protein complex. In this study, we determined the ability of MRK-003, a gamma-secretase inhibitor, to inhibit Notch3 signaling, growth, and apoptosis of lung cancer cell lines in vitro and in vivo using mouse xenograft models. We also found that MRK-003 inhibited Notch3 signaling, reduced tumor cell proliferation, inhibited serum independence, and induced apoptosis. This drug had no effect when Notch3 expression was knocked down using small interfering RNA (siRNA), suggesting that the observed effects were mediated by specific action on this receptor. In conclusion, these results support the hypothesis that inhibition of Notch activation using a gamma-secretase inhibitor represents a potential new approach for the targeted therapy of lung cancer.