Activation of Notch signaling requires intracellular routing of the receptor, but the mechanisms controlling the distinct steps in the routing process is poorly understood. We identify PKCζ as a key regulator of Notch receptor intracellular routing. When PKCζ was inhibited in the developing chick central nervous system and in cultured myoblasts, Notch-stimulated cells were allowed to undergo differentiation. PKCζ phosphorylates membrane-tethered forms of Notch and regulates two distinct routing steps, depending on the Notch activation state. When Notch is activated, PKCζ promotes re-localization of Notch from late endosomes to the nucleus and enhances production of the Notch intracellular domain, which leads to increased Notch activity. In the non-activated state, PKCζ instead facilitates Notch receptor internalization, accompanied with increased ubiquitylation and interaction with the endosomal sorting protein Hrs. Collectively, these data identify PKCζ as a key regulator of Notch trafficking and demonstrate that distinct steps in intracellular routing are differentially modulated depending on Notch signaling status.