The Notch signalling pathway mediates cell fate decisions and is tumour suppressive or oncogenic depending on the context. During lung development, Notch pathway activation inhibits the differentiation of precursor cells to a neuroendocrine fate. In small-cell lung cancer, an aggressive neuroendocrine lung cancer, loss-of-function mutations in NOTCH genes and the inhibitory effects of ectopic Notch activation indicate that Notch signalling is tumour suppressive. Here we show that Notch signalling can be both tumour suppressive and pro-tumorigenic in small-cell lung cancer. Endogenous activation of the Notch pathway results in a neuroendocrine to non-neuroendocrine fate switch in 10-50% of tumour cells in a mouse model of small-cell lung cancer and in human tumours. This switch is mediated in part by Rest (also known as Nrsf), a transcriptional repressor that inhibits neuroendocrine gene expression. Non-neuroendocrine Notch-active small-cell lung cancer cells are slow growing, consistent with a tumour-suppressive role for Notch, but these cells are also relatively chemoresistant and provide trophic support to neuroendocrine tumour cells, consistent with a pro-tumorigenic role. Importantly, Notch blockade in combination with chemotherapy suppresses tumour growth and delays relapse in pre-clinical models. Thus, small-cell lung cancer tumours generate their own microenvironment via activation of Notch signalling in a subset of tumour cells, and the presence of these cells may serve as a biomarker for the use of Notch pathway inhibitors in combination with chemotherapy in select patients with small-cell lung cancer.