During Xenopus embryogenesis, XId3, a member of the Id helix-loop-helix protein family, is expressed in a large variety of differentiating tissues including epidermis, cement gland, brain, neural tube, neural crest cell derivatives, somites, and tailbud. Transcription of XId3 is mediated by several cis-regulatory elements including an enhancer of 440 bp located 870 bp upstream from the transcription initiation site. The enhancer activity in embryos was studied using transgenic methodology. A galactosidase reporter gene, driven by a regulatory element composed of the enhancer and a minimal promoter derived from the XId3 gene, was expressed in transgenic embryos with a profile that faithfully reproduced that of the endogenous XId3 gene. The pattern resulted from a synergistic effect between the enhancer and the promoter, and in vitro transactivation assays showed that transcription can be stimulated by Notch signaling. The presence of potential Su(H) binding sites, in both the enhancer and the promoter, suggests that these represent candidates for in vivo cis-regulatory elements. The data presented here suggest that Notch control of differentiation may involve activation of transcription of Id, a negative regulator of bHLH transcription factors.