Intrathymic Notch1 signaling critically regulates T-lineage specification and commitment as well as T-cell progenitor survival and differentiation. Notch1 activation is continuously required during progression of early CD4/CD8-double-negative thymocytes to the CD4/CD8-double-positive stage. This developmental transition occurs as thymocytes migrate from the corticomedullary junction (CMJ) to the outer subcapsular zone (SCZ) of the thymus. Members of two families of structurally distinct Notch ligands, Delta-like 1 and Jagged-1, are expressed by cortical thymic epithelial cells, but it is not known which ligands are functionally required within the CMJ and SCZ microenvironmental niches. Our laboratory has investigated this question by genetically manipulating thymocyte expression of Lunatic Fringe (L-Fng), a glycosyltransferase that enhances sensitivity of Notch receptors to Delta-like ligands. This approach has revealed that low-threshold intrathymic Notch1 signals instruct multipotent thymus-seeding progenitors to suppress their B-cell potential and choose the T-cell fate. This strategy has also revealed that Delta-like Notch ligands are functionally limiting in both the CMJ and SCZ microenvironmental niches. Finally, we discuss our recent demonstration that L-Fng-mediated competition for Delta-like ligands is an important mechanism for regulating thymus size.