Benign plexiform neurofibromas in NF1 patients can transform spontaneously into malignant peripheral nerve sheath tumors (MPNSTs). Although mutations in the p53 gene have been found in a subset of MPNSTs and mouse models support a role for p53 mutations in malignant conversion, we found that each of three Schwann cell lines derived from human MPNSTs possessed active p53. One of the lines expressed the Notch intracellular domain (NICD), indicative of ongoing Notch signaling. Consistent with a role in malignancy, NICD was able to transform primary rat Schwann cells. Transformation was robust–NICD-transduced cells generated tumors in nude rats–and was associated with the loss of markers associated with Schwann cell differentiation. These data suggest that aberrant Notch signaling may contribute to the conversion of benign neurofibromas to MPNSTs.