Notch is a transmembrane receptor that controls a diverse array of cellular processes including cell proliferation, differentiation, survival, and migration. The cellular outcome of Notch signaling is dependent on extracellular and intracellular signals, but the complexities of its regulation are not well understood. Canonical Notch signaling involves ligand association that triggers sequential and regulated proteolysis of Notch at several sites. Ligand-dependent proteolysis at the S2 site removes the bulk of the extracellular domain of Notch. Subsequent γ-secretase-mediated intramembrane proteolysis of the remaining membrane-tethered Notch fragment at the S3 site produces a nuclear-destined Notch intracellular domain (NICD). Here we show that following γ-secretase cleavage, Notch is proteolyzed at a novel S5 site. We have identified this S5 site to be eight amino acids downstream of the S3 site. Biochemical fractionation and purification resulted in the identification of the S5 site protease as the mitochondrial intermediate peptidase (MIPEP). Expression of the MIPEP-cleaved NICD (ΔNICD) results in a decrease in cell viability and mitochondria membrane potential. The sequential and regulated proteolysis by γ-secretase and MIPEP suggests a new means by which Notch function can be modulated.