Previous studies imply that the intracellular domain of Notch1 must translocate to the nucleus for its activity. In this study, we demonstrate that a mNotch1 mutant protein that lacks its extracellular domain but retains its membrane-spanning region becomes proteolytically processed on its intracellular surface and, as a result, the activated intracellular domain (mNotchIC) is released and can move to the nucleus. Proteolytic cleavage at an intracellular site is blocked by protease inhibitors. Intracellular cleavage is not seen in cells transfected with an inactive variant, which includes the extracellular lin-Notch-glp repeats. Collectively, the studies presented here support the model that mNotch1 is proteolytically processed and the cleavage product is translocated to the nucleus for mNotch1 signal transduction.