Delta is a major transmembrane ligand for Notch receptor that mediates numerous cell fate decisions. The Notch signaling pathway has long been thought to be mono-directional, because ligands for Notch were generally believed to be unable to transmit signals into the cells expressing them. However, we showed here that Notch also supplies signals to neighboring mouse neural stem cells (NSCs). To investigate the Notch–Delta signaling pathway in a bi-directional manner, we analyzed functional roles of the intracellular domain of mouse Delta like protein 1 (Dll1IC). In developing mouse NSCs, Dll1IC, which is released from cell membrane by proteolysis, is present in the nucleus. Furthermore, we screened for transcription factors that bind to Dll1IC and demonstrated that Dll1IC binds specifically to transcription factors involved in TGF-β/Activin signaling—Smad2, Smad3 and Smad4—and enhances Smad-dependent transcription. In addition, the results of the present study indicated that over-expression of Dll1IC in embryonic carcinoma P19 cells induced neurons, and this induction was blocked by SB431542, which is a specific inhibitor of TGF-β/Activin signaling. These observations strongly suggested that Dll1IC mediates TGF-β/Activin signaling through binding to Smads and plays an important role for bi-directional Notch–Delta signaling pathway.