The Notch signaling pathway comprises multiple ligands that are used in distinct biological contexts. In principle, different ligands could activate distinct target programs in signal-receiving cells, but it is unclear how such ligand discrimination could occur. Here, we show that cells use dynamics to discriminate signaling by the ligands Dll1 and Dll4 through the Notch1 receptor. Quantitative single-cell imaging revealed that Dll1 activates Notch1 in discrete, frequency-modulated pulses that specifically upregulate the Notch target gene Hes1. By contrast, Dll4 activates Notch1 in a sustained, amplitude-modulated manner that predominantly upregulates Hey1 and HeyL. Ectopic expression of Dll1 or Dll4 in chick neural crest produced opposite effects on myogenic differentiation, showing that ligand discrimination can occur in vivo. Finally, analysis of chimeric ligands suggests that ligand-receptor clustering underlies dynamic encoding of ligand identity. The ability of the pathway to utilize ligands as distinct communication channels has implications for diverse Notch-dependent processes.