Drosophila imaginal rings are larval tissues composed of progenitor cells that are essential for the formation of adult foreguts, hindguts and salivary glands. Specified from subsets of ectoderm in the embryo, imaginal ring cells are kept quiescent until mid-second larval instar, and undergo rapid proliferation during the third instar to attain adequate numbers of cells that will replace apoptotic larval tissues for adult organ formation. Here we show that Notch signaling is activated in all three imaginal rings from middle embryonic stage to early pupal stage and that Notch signaling positively controls cell proliferation in all three imaginal rings during the third larval instar. Our mutant clonal analysis, knockdown and gain-of-function studies indicate that canonical Notch pathway components are involved in regulating the proliferation of these progenitor cells. Both trans-activation and cis-inhibition between the ligand and receptor control Notch activation in the imaginal ring. Serrate (Ser) is the ligand provided from neighboring imaginal ring cells that trans-activates Notch signaling, whereas both Ser and Delta (Dl) could cis-inhibit Notch activity when the ligand and the receptor are in the same cell. In addition, we show that Notch signaling expressed in middle embryonic and first larval stages is required for the initial size of imaginal rings. Taken together, these findings indicate that imaginal rings are excellent in vivo models to decipher how progenitor cell number and proliferation are developmentally regulated and that Notch signaling in these imaginal tissues is the primary growth-promoting signal that controls the size of the progenitor cell pool.