Although studies have shown that the Notch2 family member is critical for embryonic development, little is known concerning its role in hematopoiesis. In this study, we show that the effects of an activated form of Notch2 (N2IC) on the T-cell lineage are dosage related. High-level expression of N2IC results in the development of T-cell leukemias. In contrast, lower-level expression of N2IC does not lead to transformation but skews thymocyte development to the CD8 lineage. Underlying this skew is a dramatic enhancement in positive selection and CD8SP maturation. N2IC permits early B-cell development but blocks the maturation of conventional B2 cells at the pre-B stage, which is the limit of endogenous Notch2 protein expression in developing B cells. Most strikingly, while B2 B cell development is blocked at the pre-B-cell stage, N2IC promotes the selective development of LPS-responsive B1 B cells. This study implicates a role for Notch2 in the maturation of the CD8 lineage and suggests a novel function for Notch2 in the development of the B1 B-cell subset.