During early development of the Drosophila nervous system, Notch signalling limits neuroblast numbers by preventing the cells that neighbour neuroblasts from also choosing a neuroblast fate. Disruption of Notch signalling prevents this ‘lateral inhibition’ and produces hyperplasias of the embryonic nervous system. The absence of pecanex (pcx), which encodes a conserved multi-pass transmembrane protein of unknown function, also causes a similar neurogenic phenotype. Now, Kenji Matsuno and colleagues propose that Pcx is a novel component of the Notch signalling pathway in Drosophila (see p. 558). They show that Pcx resides in the endoplasmic reticulum (ER) and is required upstream of activated Notch. Disruption of pcx function, they report, results in ER enlargement. However, hyper-induction of the unfolded protein response in the absence of pcx suppresses both ER enlargement and the development of a neurogenic phenotype. Together, these results suggest that the ER plays a previously unrecognised role in Notch signalling that involves Notch folding and that this ER function depends on pcx activity.