Tlx3 (HOX11L2) is regarded as one of the selector genes in excitatory versus inhibitory fate specification of neurons in distinct regions of the nervous system. Expression of Tlx3 in a post-mitotic immature neuron favors a glutamatergic over GABAergic fate. The factors that regulate Tlx3 have immense importance in the fate specification of glutamatergic neurons. Here, we have shown that Notch target gene, Hes-1, negatively regulates Tlx3 expression, resulting in decreased generation of glutamatergic neurons. Down-regulation of Hes-1 removed the inhibition on Tlx3 promoter, thus promoting glutamatergic differentiation. Promoter-protein interaction studies with truncated/mutated Hes-1 protein suggested that the co-repressor recruitment mediated through WRPW domain of Hes-1 has contributed to the repressive effect. Our results clearly demonstrate a new and unique role for canonical Notch signaling through Hes-1, in neurotransmitter/subtype fate specification of neurons in addition to its known functional role in proliferation/maintenance of neural progenitors.