Notch signalling is a well-conserved signalling pathway that regulates cell fate through cell-cell communication. A typical feature of Notch signalling is 'lateral inhibition', whereby two neighbouring cells of equivalent state of differentiation acquire different cell fates. Recently, mathematical and computational approaches have addressed the Notch dynamics in Drosophila neural development. Typical examples of lateral inhibition are observed in the specification of neural stem cells in the embryo and sensory organ precursors in the thorax. In eye disc development, Notch signalling cooperates with other signalling pathways to define the evenly spaced positioning of the photoreceptor cells. The interplay between Notch and epidermal growth factor receptor signalling regulates the timing of neural stem cell differentiation in the optic lobe. In this review, we summarize the theoretical studies that have been conducted to elucidate the Notch dynamics in these systems and discuss the advantages of combining mathematical models with biological experiments.