Adipose tissue development is dependent on multiple signaling mechanisms and cell-cell interactions that regulate adipogenesis, angiogenesis and extracellular remodeling. The Notch signaling pathway is an important cell-fate determinant whose role in adipogenesis is not clearly defined. To address this issue, we examined the effect of inhibition of Notch signaling by soluble-Jagged1 in the 3T3-L1 preadipocyte line. In vitro, soluble-Jagged1 expression in 3T3-L1 cells altered cell morphology, increased the rate of cell proliferation and induced an early transcriptional response to differentiation stimuli. However, these cells did not form mature adipocytes due to their inability to exit the cell-cycle in response to serum-starvation and glucocorticoid-induced cell-cycle arrest. In contrast, subcutaneous allografts of soluble-Jagged1 cells formed larger fat pads containing lipid-filled adipocytes with improved neovascularization compared with controls. Since adipogenesis is tightly associated with angiogenesis, we evaluated the influence of soluble-Jagged1 on endothelial cells by culturing them in cell-free conditioned media from preadipocytes. Soluble Jagged1-mediated inhibition of Notch signaling increased levels of secreted cytokines, potentially contributing to the improved cell growth and proliferation observed in these cultures. Our findings demonstrate an initial requirement of Notch signaling inactivation for preadipocyte cell commitment and support the hypothesis that cell-to-cell crosstalk between the preadipocytes and endothelial cells is required for neovascularization and remodeling of the tissue to promote hyperplasia and hypertrophy of differentiating adipocytes.