Notch signaling is an evolutionarily conserved signal transduction pathway that is essential for metazoan development. Upon ligand binding, the Notch intracellular domain (NOTCH ICD) translocates into the nucleus and forms a complex with the transcription factor RBPJ (also known as CBF1 or CSL) to activate expression of Notch target genes. In the absence of a Notch signal, RBPJ acts as a transcriptional repressor. Using a proteomic approach, we identified L3MBTL3 (also known as MBT1) as a novel RBPJ interactor. L3MBTL3 competes with NOTCH ICD for binding to RBPJ In the absence of NOTCH ICD, RBPJ recruits L3MBTL3 and the histone demethylase KDM1A (also known as LSD1) to the enhancers of Notch target genes, leading to H3K4me2 demethylation and to transcriptional repression. Importantly, in vivo analyses of the homologs of RBPJ and L3MBTL3 in Drosophila melanogaster and Caenorhabditis elegans demonstrate that the functional link between RBPJ and L3MBTL3 is evolutionarily conserved, thus identifying L3MBTL3 as a universal modulator of Notch signaling in metazoans.