The canonical members of the Jagged/Serrate and Delta families of transmembrane ligands have an extracellular, amino-terminal C2 domain that binds to phospholipids and is required for optimal activation of the Notch receptor. Somatic mutations that cause amino substitutions in the C2 domain in human JAGGED1 (JAG1) have been identified in tumors. We found in reporter cell assays that mutations affecting an N-glycosylation site reduced the ligand's ability to activate Notch. This N-glycosylation site located in the C2 domain is conserved in the Jagged/Serrate family but is lacking in the Delta family. Site-specific glycan analysis of the JAG1 amino terminus demonstrated that occupancy of this site by either a complex-type or high-mannose N-glycan was required for full Notch activation in reporter cell assays. Similarly to JAG1 variants with defects in Notch binding, N-glycan removal, either by mutagenesis of the glycosylation site or by endoglycosidase treatment, reduced receptor activation. The N-glycan variants also reduced receptor activation in a Notch signaling-dependent vascular smooth muscle cell differentiation assay. Loss of the C2 N-glycan reduced JAG1 binding to liposomes to a similar extent as the loss of the entire C2 domain. Molecular dynamics simulations suggested that the presence of the N-glycan limits the orientation of JAG1 relative to the membrane, thus facilitating Notch binding. These data are consistent with a critical role for the N-glycan in promoting a lipid-binding conformation that is required to orient Jagged at the cell membrane for full Notch activation.