The Fringe protein of Drosophila and its vertebrate homologues function in boundary determination during pattern formation^,,,,,,,,. Fringe has been proposed to inhibit Serrate–Notch signalling but to potentiate Delta–Notch signalling. Here we show that Fringe and Notch form a complex through both the Lin–Notch repeats and the epidermal growth factor repeats 22–36 (EGF22–36) of Notch when they are co-expressed. The Abruptex^59b(Ax^59b) and Ax^M1 mutations, which are caused by missense mutations in EGF repeats 24 and 25, respectively, abolish the Fringe–Notch interaction through EGF22-36, whereas the l(1)N^B mutation in the third Lin–Notch repeat of Notch abolishes the interaction through Lin–Notch repeats. Ax mutations also greatly affect the Notch response to ectopic Fringe in vivo. Results from in vitro protein mixing experiments and subcellular colocalization experiments indicate that the Fringe–Notch complex may form before their secretion. These findings explain how Fringe acts cell-autonomously to modulate the ligand preference of Notch and why the Fringe–Notch relationship is conserved between phyla and in the development of very diverse structures.