We investigated Notch signaling during chondrogenesis in human bone marrow stromal cells (hMSC) in three-dimensional cell aggregate culture. Expression analysis of Notch pathway genes in 14-day chondrogenic cultures showed that the Notch ligand Jagged-1 (Jag-1) sharply increased in expression, peaking at day 2, and then declined. A Notch target gene, HEY-1, was also expressed, with a temporal profile that closely followed the expression of Jag-1, and this preceded the rise in type II collagen expression that characterized chondrogenesis. We demonstrated that the shut-down in Notch signaling was critical for full chondrogenesis, as adenoviral human Jag-1 transduction of hMSC, which caused continuous elevated expression of Jag-1 and sustained Notch signaling over 14 days, completely blocked chondrogenesis. In these cultures, there was inhibited production of extracellular matrix, and the gene expression of aggrecan and type II collagen were strongly suppressed; this may reflect the retention of a prechondrogenic state. The JAG-1-mediated Notch signaling was also shown to be necessary for chondrogenesis, as N-[N-(3,5-difluorophenacetyl-L-alanyl)]-(S)-phenylglycine t-butyl ester (DAPT) added to cultures on days 0-14 or just days 0-5 inhibited chondrogenesis, but DAPT added from day 5 did not. The results thus showed that Jag-1-mediated Notch signaling in hMSC was necessary to initiate chondrogenesis, but it must be switched off for chondrogenesis to proceed.