Recognition of antigen by T cells in the periphery may lead either to the generation of productive immunity or the induction of tolerance. These two functional outcomes are a consequence of distinct pathways of T-cell differentiation. T cells are selected to become regulatory cells and their function is to maintain homeostasis with the immune system. In this review we discuss the cell-fate decisions that T cells might make allowing them to promote immunity or induce tolerance in the context of the role that Notch signalling may play in this process.