Notch signaling is an evolutionarily conserved mechanism that plays a critical role in the determination of multiple cellular differentiation pathways and morphogenesis during embryogenesis. The limb bud high-density culture is an established model that recapitulates mesenchymal condensation and chondrocyte differentiation. Reverse transcription-polymerase chain reaction (RT-PCR) showed that Notch and its related genes were expressed in such cultures on day 1 and reached a peak between day 3 and day 5, when cell condensation and nodule formation were initiated. Immunohistochemical experiments revealed that the expression of Notch1 was initially localized within the nodules and shifted to their peripheral region as the cell differentiation progressed. We disrupted Notch signaling by using a gamma-secretase inhibitor, N-[N-(3,5-difluorophenacetyl-L-alanyl)]-S-phenylglycine t-butyl ester (DAPT), to analyze the function of Notch signaling in the culture system. The blocking of Notch signaling by DAPT apparently promoted the initiation of prechondrogenic condensation and fusion of the nodules, and such an effect was reversed by exogenous expression of the Notch cytoplasmic domain. DAPT treatment also induced chondrogenic markers and bone morphogenetic protein (BMP)-related molecules, including type II collagen, Sox9, GDF5, and Id1. These observations imply that the Notch signal may have an important role in chondrogenic differentiation by negatively regulating the initiation of prechondrogenic condensation and nodule formation.