Spermathecae are glandular organs in the insect female reproductive tract that play essential roles in insect reproduction; however, the molecular mechanism involved in their development is largely unknown. Drosophila spermathecae consist of class-III secretory units, in which each secretory cell (SC) discharges its products to the central lumen through an end-apparatus and a canal. Secretory unit formation in Drosophila spermathecae utilizes a fixed cell lineage, in which each secretory unit precursor (SUP) divides to produce one pIIb cell and one pIIa cell. The former differentiates into an apical cell (AC), whereas the latter divides again to produce an SC and a basal cell (BC). It is unclear how each cell acquires its identity and contributes to secretory unit formation. Here, we demonstrate that Notch signaling is required and sufficient for the specification of lumen epithelial precursors (LEPs; vs. SUPs), pIIb (vs. pIIa), and SCs (vs. BCs) sequentially. To our surprise, Notch activation in LEPs and SCs apparently utilizes different ligand mechanisms. In addition, Notch signaling both suppresses and activates transcription factors Hindsight (Hnt) and Cut during spermathecal lineage specification, supporting the notion that Notch signaling can have opposite biological outcomes in different cellular environments. Furthermore, LEP-derived epithelial cells (ECs) and ACs show distinct cellular morphology and are essential for securing secretory units to the epithelial lumen. Our work demonstrates, for the first time, the dynamic role of Notch signaling in binary cell fate determination in Drosophila spermathecae and the role of ECs and ACs in secretory unit formation.