Insulinoma-associated protein 1 (INSM1) is expressed exclusively in embryonic developing neuroendocrine (NE) tissues. INSM1 gene expression is specific for small-cell lung cancer (SCLC), along with achaete-scute homolog-like 1 (ASCL1) and several NE molecules, such as chromogranin A, synaptophysin, and neural cell adhesion molecule 1. However, the underlying biological role of INSM1 in lung cancer remains largely unknown. We first showed that surgically resected SCLC samples specifically expressed INSM1. Forced expression of the INSM1 gene in adenocarcinoma cell lines (H358 and H1975) induced the expression of ASCL1, brain-2 (BRN2), chromogranin A, synaptophysin, and neural cell adhesion molecule 1; in contrast, knockdown of the INSM1 gene by siRNA in SCLC (H69 and H889) decreased their expression. However, forced/knockdown expression of ASCL1 and BRN2 did not affect INSM1 expression. A chromatin immunoprecipitation study revealed that INSM1 bound to the promoter region of the ASCL1 gene. A xenotransplantation assay using tet-on INSM1 gene-transfected adenocarcinoma cell lines demonstrated that INSM1 induced NE differentiation and growth inhibition. Furthermore, we found that INSM1 was not expressed in non-small-cell lung cancer and some SCLC cell lines expressing Notch1-Hes1. By forced/knockdown expression of Notch1 or Hes1 genes, we revealed that Notch1-Hes1 signaling suppressed INSM1, as well as ASCL1 and BRN2. INSM1, expressed exclusively in SCLC, is a crucial regulator of NE differentiation in SCLCs, and is regulated by the Notch1-Hes1 signaling pathway.