The formation of signalling boundaries is one of the strategies employed by the Notch (N) pathway to give rise to two distinct signalling populations of cells. Unravelling the mechanisms involved in the regulation of these signalling boundaries is essential to understanding the role of N during development and diseases. The function of N in the segmentation of the Drosophila leg provides a good system to pursue these mechanisms at the molecular level. Transcriptional and post-transcriptional regulation of the N ligands, Serrate (Ser) and Delta (Dl) generates a signalling boundary that allows the directional activation of N in the distalmost part of the segment, the presumptive joint. A negative feedback loop between odd-skipped-related genes and the N pathway maintains this signalling boundary throughout development in the true joints. However, the mechanisms controlling N signalling boundaries in the tarsal joints are unknown. Here we show that the non-canonical tarsal-less (tal) gene (also known as pri), which encodes for four small related peptides, is expressed in the N-activated region and required for joint development in the tarsi during pupal development. This function of tal is both temporally and functionally separate from the tal-mediated tarsal intercalation during mid-third instar that we reported previously. In the pupal function described here, N signalling activates tal expression and reciprocally Tal peptides feedback on N by repressing the transcription of Dl in the tarsal joints. This Tal-induced repression of Dl is mediated by the post-transcriptional activation of the Shavenbaby transcription factor, in a similar manner as it has been recently described in the embryo. Thus, a negative feedback loop involving Tal regulates the formation and maintenance of a Dl+/Dl- boundary in the tarsal segments highlighting an ancient mechanism for the regulation of N signalling based on the action of small cell signalling peptides.