Functional ␥-secretase inhibitors (FGSIs) can block the cleavage of several transmembrane proteins including amyloid precursor protein (APP), and the cell fate regulator Notch-1. FGSIs, by inhibiting APP processing, block the generation of amyloid  (A) peptides and may slow the development of Alzheimer's disease. FGSIs used to inhibit APP processing may disrupt Notch processing, thus interfering with cell fate determination. Described herein is a FGSI-mediated gastrointestinal toxicity characterized by cell population changes in the ileum of rats, which are indicative of Notch signaling disruption. Microarray analysis of ileum from FGSItreated rats revealed differential expression responses in a number of genes indicative of Notch signaling perturbation, including the serine protease adipsin. We were able to show that FGSI-treated rats had elevated levels of adipsin protein in gastrointestinal contents and feces, and by immunohistochemistry demonstrated that adipsin containing ileum crypt cells were increased in FGSI-treated rats. The mouse Adipsin proximal promoter contains a putative binding site for the Notchinduced transcriptional regulator Hes-1, which we demonstrate is able to bind Hes-1. Additional studies in 3T3-L1 preadipocytes demonstrate that this FGSI inhibits Hes-1 expression while up-regulating adipsin expression. Overexpression of Hes-1 was able to down-regulate adipsin expression and block pre-adipocyte differentiation. We propose that adipsin is a Hes-1-regulated gene that is de-repressed during FGSI-mediated disruption of Notch/Hes-1 signaling. Additionally, the aberrant expression of adipsin, and its presence in feces may serve as a noninvasive biomarker of gastrointestinal toxicity associated with perturbed Notch signaling.The small intestine can be a site of injury associated with drug treatment (1-3). Tissue organization within the small intestine relies upon a small number of stem cells in the intestinal crypts to continuously produce several types of differentiated cells that together comprise the villous epithelium (enterocytes, goblet cells, paneth cells, and enteroendocrine cells) (4). This rapid maturation, transport, and cell loss make the small intestine particularly susceptible to toxicants that affect cell differentiation and proliferation (5, 6). The process by which dividing intestinal epithelial stem cells in the crypt produce differentiated progeny requires the transcriptional regulation of genes necessary for cell fate determination. The control of this cell fate determination pathway is dependent on a number of positive and negative transcription factors that operate in undifferentiated precursor cells of the crypt (6 -8). For example, the bHLH transcriptional repressor protein Hairy and Enhancer of split homologue-1 (Hes-1) 1 has been shown to be important in determining whether differentiating intestinal epithelial stem cells adopt an exocrine/secretory (goblet cell, enteroendocrine cell, paneth cell) fate or an absorptive (enterocyte) fate (9). Expression of Hes-1 is kn...