Clara cells of mammalian airways have multiple functions and are morphologically heterogeneous. Although Notch signaling is essential for the development of these cells, it is unclear how Notch influences Clara cell specification and if diversity is established among Clara cell precursors. Here we identify expression of the secretoglobin Scgb3a2 and Notch activation as early events in a program of secretory cell fate determination in developing murine airways. We show that Scgb3a2 expression in vivo is Notch-dependent at early stages and ectopically induced by constitutive Notch1 activation, and also that in vitro Notch signaling together with the pan-airway transcription factor Ttf1 (Nkx2.1) synergistically regulate secretoglobin gene transcription. Furthermore, we identified a subpopulation of secretory precursors juxtaposed to presumptive neuroepithelial bodies (NEBs), distinguished by their strong Scgb3a2 and uroplakin 3a ( Upk3a ) signals and reduced Ccsp (Scgb1a1) expression. Genetic ablation of Ascl1 prevented NEB formation and selectively interfered with the formation of this subpopulation of cells. Lineage labeling of Upk3a -expressing cells during development showed that these cells remain largely uncommitted during embryonic development and contribute to Clara and ciliated cells in the adult lung. Together, our findings suggest a role for Notch in the induction of a Clara cell-specific program of gene expression, and reveals that the NEB microenvironment in the developing airways is a niche for a distinct subset of Clara-like precursors.