Gamma-secretase inhibitors (GSIs) block the activation of the oncogenic protein Notch homolog-1 (NOTCH1) in T cell acute lymphoblastic leukemia (T-ALL). However, limited antileukemic cytotoxicity and severe gastrointestinal toxicity have restricted the clinical application of these targeted drugs. Here we show that combination therapy with GSIs plus glucocorticoids can improve the antileukemic effects of GSIs and reduce their gut toxicity in vivo. Inhibition of NOTCH1 signaling in glucocorticoid-resistant T-ALL restored glucocorticoid receptor autoupregulation and induced apoptotic cell death through induction of the gene encoding BCL-2-like apoptosis initiator-11 (BCL2L11). GSI treatment resulted in cell cycle arrest and accumulation of goblet cells in the gut mediated by upregulation of the gene encoding the transcription factor Krüppel-like factor-4 (Klf4), a negative regulator of the cell cycle required for goblet cell differentiation. In contrast, glucocorticoid treatment induced transcriptional upregulation of cyclin D2 (Ccnd2) and protected mice from developing the intestinal goblet cell metaplasia typically induced by inhibition of NOTCH signaling with GSIs. These results support a role for glucocorticoids plus GSIs in the treatment of glucocorticoid-resistant T-ALL.