Signaling through Notch receptors has been implicated in the control of cellular differentiation in animals ranging from nematodes to humans. Starting from a human expressed sequence tag-containing sequence resembling that of Serrate, the gene for a ligand of Drosophila melanogaster Notch, we assembled a full-length cDNA, now called human Jagged2, from overlapping cDNA clones. The full-length cDNA encodes a polypeptide having extensive sequence homology to Serrate (40.6% identity and 58.7% similarity) and even greater homology to several putative mammalian Notch ligands that have subsequently been described. When in situ hybridization was performed, expression of the murine Jagged2 homolog was found to be highest in fetal thymus, epidermis, foregut, dorsal root ganglia, and inner ear. In Northern blot analysis of RNA from tissues of 2-week-old mice, the 5.0-kb Jagged2 transcript was most abundant in heart, lung, thymus, skeletal muscle, brain, and testis. Immunohistochemistry revealed coexpression of Jagged2 and Notch1 within thymus and other fetal murine tissues, consistent with interaction of the two proteins in vivo. Coculture of fibroblasts expressing human Jagged2 with murine C2C12 myoblasts inhibited myogenic differentiation, accompanied by increased Notch1 and the appearance of a novel 115-kDa Notch1 fragment. Exposure of C2C12 cells to Jagged2 led to increased amounts of Notch mRNA as well as mRNAs for a second Notch receptor, Notch3, and a second Notch ligand, Jagged1. Constitutively active forms of Notchl in C2C12 cells also induced increased levels of the same set of mRNAs, suggesting positive feedback control of these genes initiated by binding of Jagged2 to Notch1. This feedback control may function in vivo to coordinate differentiation across certain groups of progenitor cells adopting identical cell fates.