Endothelial cells and mural cells (smooth muscle cells, pericytes, or fibroblasts) are known to communicate with one another. Their interactions not only serve to support fully functional blood vessels but also can regulate vessel assembly and differentiation or maturation. In an effort to better understand the molecular components of this heterotypic interaction, we used a 3D model of angiogenesis and screened for genes, which were modulated by coculturing of these 2 different cell types. In doing so, we discovered that NOTCH3 is one gene whose expression is robustly induced in mural cells by coculturing with endothelial cells. Knockdown by small interfering RNA revealed that NOTCH3 is necessary for endothelial-dependent mural cell differentiation, whereas overexpression of NOTCH3 is sufficient to promote smooth muscle gene expression. Moreover, NOTCH3 contributes to the proangiogenic abilities of mural cells cocultured with endothelial cells. Interestingly, we found that the expression of NOTCH3 is dependent on Notch signaling, because the -secretase inhibitor DAPT blocked its upregulation. Furthermore, in mural cells, a dominant-negative Mastermind-like1 construct inhibited NOTCH3 expression, and endothelial-expressed JAGGED1 was required for its induction. Additionally, we demonstrated that NOTCH3 could promote its own expression and that of JAGGED1 in mural cells. Taken together, these data provide a mechanism by which endothelial cells induce the differentiation of mural cells through activation and induction of NOTCH3. These findings also suggest that NOTCH3 has the capacity to maintain a differentiated phenotype through a positive-feedback loop that includes both autoregulation and JAGGED1 expression.