The discovery that the human Jagged1 gene (JAG1) is the Alagille syndrome disease gene indicated that Notch signaling has an important role in bile duct homeostasis. The functional study of this signaling pathway has been difficult because mice with targeted mutations in Jagged1, Notch1, or Notch2 have an embryonic lethal phenotype. We have previously generated mice with inducible Notch1 disruption using an interferon-inducible Cre-recombinase transgene in combination with the loxP flanked Notch1 gene. We used this conditional Notch1 knockout mouse model to investigate the role of Notch1 signaling in liver cell proliferation and differentiation. Deletion of Notch1 did not result in bile duct paucity, but, surprisingly, resulted in a continuous proliferation of hepatocytes. In conclusion, within weeks after Notch1 inactivation, the mice developed nodular regenerative hyperplasia without vascular changes in the liver.