The specification of polar, main-body and stalk follicle cells in the germarium of the Drosophila ovary plays a key role in the formation of the egg chamber and polarisation of its anterior-posterior axis. High levels of Notch pathway activation, resulting from a germline Delta ligand signal, induce polar cells. Here we show that low Notch activation levels, originating from Delta expressed in the polar follicle cells, are required for stalk formation. The metalloprotease Kuzbanian-like, which cleaves and inactivates Delta, reduces the level of Delta signaling between follicle cells, thereby limiting the size of the stalk. We find that Notch activation is required in a continuous fashion to maintain the polar and stalk cell fates. We further demonstrate that mutual antagonism between the Notch and JAK/STAT signaling pathways provides a crucial facet of follicle cell patterning. Notch signaling in polar and main-body follicle cells inhibits JAK/STAT signaling by preventing STAT nuclear translocation, thereby restricting the influence of this pathway to stalk cells. Conversely, signaling by JAK/STAT reduces Notch signaling in the stalk. Thus, variations in the levels of Notch pathway activation, coupled with a continuous balance between the Notch and JAK/STAT pathways, specify the identity of the different follicle cell types and help establish the polarity of the egg chamber.