The four highly conserved Notch receptors receive short-range signals that control many biological processes during development and in adult vertebrate tissues. The involvement of Notch1 signaling in tissue self-renewal is less clear, however. We developed a novel genetic approach N1IP-CRE (Notch1 Intramembrane Proteolysis) to follow, at high resolution, the descendents of cells experiencing Notch1 activation in the mouse. By combining N1IP-CRE with loss-of-function analysis, Notch activation patterns were correlated with function during development, self-renewal and malignancy in selected tissues. Identification of many known functions of Notch1 throughout development validated the utility of this approach. Importantly, novel roles for Notch1 signaling were identified in heart, vasculature, retina and in the stem cell compartments of self-renewing epithelia. We find that the probability of Notch1 activation in different tissues does not always indicate a requirement for this receptor and that gradients of Notch1 activation are evident within one organ. These findings highlight an underappreciated layer of complexity of Notch signaling in vivo. Moreover, NIP-CRE represents a general strategy applicable for monitoring proteolysis-dependent signaling in vivo.