Caenorhabditis elegans germ-line proliferation is controlled by an inductive interaction between the somatic distal tip cell and the germ line. GLP-1, a member of the Notch family of transmembrane receptors, is required continuously in the germ line to transduce the proliferative signal. In the absence of GLP-1, all proliferative germ cells exit the mitotic cell cycle and enter meiotic prophase. We have characterized an activating mutation in glp-1, oz112gf, that has the opposite phenotype. Homozygous glp-1(oz112gf) hermaphrodites and males have a completely tumorous germ line in which germ cells never leave the mitotic cycle. In glp-1(oz112gf) heterozygotes, germ-line polarity is established correctly, but as adults age, the distal proliferative population expands leading to a late-onset tumorous phenotype. The mutant receptor is constitutively active, promoting proliferation in the absence of ligand. The normal distal-proximal spatial restriction of GLP-1 expression is lost in tumorous and late-onset tumorous animals; ectopically proliferating germ cells contain membrane-associated GLP-1. The correlation between proliferation and expression, both in wild-type where glp-1 signalling is limited by localized ligand and in glp-1(oz112gf) where signalling is ligand-independent, suggests that glp-1 signalling positively regulates GLP-1 expression. In addition to germ-line defects, glp-1(oz112gf) causes inappropriate vulval cell fate specification. A missense mutation in a conserved extracellular residue, Ser642, adjacent to the transmembrane domain, is sufficient to confer the glp-1(oz112gf) mutant phenotypes. Two mammalian Notch family members, TAN-1 and int-3, are proto-oncogenes. Thus, activating mutations in both invertebrate and vertebrate Notch family members can lead to tumor formation.