Notochord and floor plate cells are sources of molecules that pattern tissues near the midline, including the spinal cord. Hypochord cells are also found at the midline of anamniote embryos and are important for aorta development. Delta–Notch signaling regulates midline patterning in the dorsal organizer by inhibiting notochord formation and promoting hypochord and possibly floor plate development, but the precise mechanisms by which this regulation occurs are unknown. We demonstrate here that floor plate and hypochord cells arise from distinct regions of the zebrafish shield. Blocking Notch signaling during gastrulation entirely prevented hypochord specification but only reduced the number of floor plate cells that developed compared to control embryos. In contrast, elevation of Notch signaling at the beginning of gastrulation caused expansion of hypochord at the expense of notochord, but floor plate was not affected. A cell proliferation assay revealed that Notch signaling maintains dividing floor plate progenitors. Together, our results indicate that Notch signaling regulates allocation of appropriate numbers of different midline cells by different mechanisms.