Stem cells have become a major focus of scientific interest as a potential source of somatic cell types for biomedical applications. Understanding and controlling the elicitors and mechanisms in differentiation of pluripotent stem cell-derived somatic cell types remains a key challenge. The major types of molecular processes that control cellular differentiation involve evolutionary conserved cell signaling pathways. Notch receptors participate in a wide variety of biological processes, including cell fate decisions of stem cells. This study explores the potential of protein transduction to directly deliver recombinant Notch-1 intracellular domain (NICD) into mammalian cells in order to accomplish transgene-free Notch activation. We engineered a cell-permeant version of NICD and explored its function on mouse and human neural stem cells. We show that NICD transduction modulates known direct and indirect Notch target genes and antagonizes the DAPT-mediated inhibition of Notch signaling on the transcriptional level. Moreover, NICD enhances cell proliferation accompanied by increased cyclin D1 and decreased p27 protein levels. In the absence of growth factors NICD strongly impairs neuronal differentiation while being insufficient to keep cells in a proliferative state. Furthermore, our studies depict NICD protein transduction as a novel tool for a time and dose-dependent non-genetic modulation of Notch signaling to decipher its cellular functions.