Here we report the isolation of a rat cDNA clone, Jagged, which we show encodes a ligand for vertebrate Notch. Our conclusion is based on three observations. First, sequence analysis reveals substantial homology between Jagged and invertebrate ligands for the LIN-12/Notch proteins. Second, in situ hybridization of rat embryos identifies both distinct and overlapping patterns of gene expression for Jagged with those for Notch1, Notch2, and Notch3. Finally, the biological activity of Jagged was tested using a cell culture assay in which Jagged activates rat Notch1 expressed in myoblasts and prevents muscle cell differentiation. Our data support the hypothesis that Notch-ligand interactions function in maintaining mammalian cells in an undifferentiated state.