Drug resistance remains a critical problem in the treatment of patients with multiple myeloma. Recent studies have determined that Notch signaling plays a major role in bone marrow (BM) stroma-mediated protection of myeloma cells from de novo drug-induced apoptosis. Here, we investigated whether pharmacologic inhibition of Notch signaling could affect the viability of myeloma cells and their sensitivity to chemotherapy. Treatment with a gamma-secretase inhibitor (GSI) alone induced apoptosis of myeloma cells via specific inhibition of Notch signaling. At concentrations toxic for myeloma cell lines and primary myeloma cells, GSI did not affect normal BM or peripheral blood mononuclear cells. Treatment with GSI prevented BM stroma-mediated protection of myeloma cells from drug-induced apoptosis. The cytotoxic effect of GSI was mediated via Hes-1 and up-regulation of the proapoptotic protein Noxa. In vivo experiments using xenograft and SCID-hu models of multiple myeloma demonstrated substantial antitumor effect of GSI. In addition, GSI significantly improved the cytotoxicity of the chemotherapeutic drugs doxorubicin and melphalan. Thus, this study demonstrates that inhibition of Notch signaling prevents BM-mediated drug resistance and sensitizes myeloma cells to chemotherapy. This may represent a promising approach for therapeutic intervention in multiple myeloma.