Astrocytes migrate from the optic nerve into the inner retina, forming a template upon which retinal vessels develop. In the Nuc1 rat, mutation in the gene encoding βA3/A1-crystallin disrupts both Notch signalling in astrocytes and formation of the astrocyte template. Here we show that loss of βA3/A1-crystallin in astrocytes does not impede Notch ligand binding or extracellular cleavages. However, it affects vacuolar-type proton ATPase (V-ATPase) activity, thereby compromising acidification of the endolysosomal compartments, leading to reduced γ-secretase-mediated processing and release of the Notch intracellular domain (NICD). Lysosomal-mediated degradation of Notch is also impaired. These defects decrease the level of NICD in the nucleus, inhibiting the expression of Notch target genes. Overexpression of βA3/A1-crystallin in those same astrocytes restored V-ATPase activity and normal endolysosomal acidification, thereby increasing the levels of γ-secretase to facilitate optimal Notch signalling. We postulate that βA3/A1-crystallin is essential for normal endolysosomal acidification, and thereby, normal activation of Notch signalling in astrocytes.