Abstract The Notch pathway is a highly conserved signaling system that plays an important role in development and tissue homeostasis. While Notch mutations are well characterized and implicated in hematological malignancies such as T-cell acute lymphoblastic leukemia, mutations in solid tumors were not reported until recently. With the whole genomic deep sequencing of a large number of samples, deregulated Notch signaling has been implicated in a small percentage of solid tumors such as ovarian, lung, and triple negative breast cancer due to genomic alterations including mutations, amplification, and fusion of Notch pathway components. Inhibition of Notch signaling may provide an attractive targeted cancer therapeutic strategy. We have identified and characterized LY3039478 a novel small molecule that is an exquisitely potent inhibitor of Notch-1 intracellular domain (N1ICD) cleavage with an IC50 of ∼1nM in most of the tumor cell lines tested. We also demonstrate that LY3039478 potently inhibits mutant Notch receptor activity. In a xenograft tumor model, LY3039478 inhibited N1ICD cleavage and expression of Notch-regulated genes in the tumor microenvironment. The inhibition of Notch cleavage also resulted in the induction of apoptosis in a Notch-dependent xenograft model. Using extensive PK/PD data we determined the strength and duration of N1ICD cleavage required for anti-tumor activity which was observed in several xenograft tumors including patient derived tumors representing colon, lung, ovarian, gastric, and breast cancer and glioblastoma. To mitigate the mucoid gasteroentropathy caused by Notch inhibition, PK/PD data were incorporated in devising dosing strategies that identified an optimal intermittent dosing schedule without negatively impacting efficacy. Furthermore, the mucoid gastroentropathy was also mitigated by the prophylactic administration of dexamethasone without negatively impacting the Notch inhibitor mediated efficacy. Mechanistic studies revealed that dexamethasone does not interfere with LY3039478-mediated inhibition of N1ICD cleavage and gene expression but alters the expression of stem cell gene expression in GI tract. In summary, we have characterized an orally bio-available small molecule Notch inhibitor that may provide therapeutic benefit to cancer patients with deregulated Notch signaling. LY3039478 is specifically designed to potently inhibit Notch signaling and is being investigated in Phase I. Citation Format: Mark H. Bender, Hong Gao, Andrew R. Capen, Julia M. Clay, Philip A. Hipskind, Jon K. Reel, Maciej J. Zamek-Gliszczynski, Jason R. Manro, Karim Benhadji, Bharvin K. R. Patel. Novel inhibitor of Notch signaling for the treatment of cancer. abstract. In: Proceedings of the 104th Annual Meeting of the American Association for Cancer Research; 2013 Apr 6-10; Washington, DC. Philadelphia (PA): AACR; Cancer Res 2013;73(8 Suppl):Abstract nr 1131. doi:10.1158/1538-7445.AM2013-1131