Notch signaling regulates squamous cell proliferation and differentiation and is frequently disrupted in squamous cell carcinomas, in which Notch is tumor suppressive. Here, we show that conditional activation of Notch in squamous cells activates a context-specific gene expression program through lineage-specific regulatory elements. Among direct Notch target genes are multiple DNA damage response genes, including , which we show is required for Notch-induced differentiation of squamous carcinoma cells and TERT-immortalized keratinocytes. is epistatic to , a gene that encodes the PP2A B55α subunit, which we show interacts with IER5 in cells and in purified systems. Thus, Notch and DNA-damage response pathways converge in squamous cells on common genes that promote differentiation, which may serve to eliminate damaged cells from the proliferative pool. We further propose that crosstalk involving Notch and PP2A enables tuning and integration of Notch signaling with other pathways that regulate squamous differentiation.