Drosophila producing a mutant form of the putative transcription coregulator, Split ends (Spen), originally identified in the analysis of neuronal development, display diverse immune defects. In order to understand the role of Spen in the innate immune response, we analyzed the transcriptional defects associated with spen mutant hemocytes and their relationship to the Notch signaling pathways. Spen is regulated by the Notch pathway in the lymph glands and is required for Notch-dependent activation of a large number of genes involved in energy metabolism and differentiation. Analysis of the epigenetic marks associated with Spen-dependent genes indicates that Spen performs its function as a coactivator by regulating chromatin modification. Intriguingly, expression of the Spen-dependent genes was transiently downregulated in a Notch-dependent manner by the Dif activated upon recognition of pathogen-associated molecules, demonstrating the existence of cross talk between hematopoietic regulation and the innate immune response. Our observations reveal a novel connection between the Notch and Toll/IMD signaling pathways and demonstrate a coactivating role for Spen in activating Notch-dependent genes in differentiating cells.