The Notch pathway is a conserved cell-cell communication pathway that controls cell fate decisions. Here we sought to determine how Notch pathway activation inhibits the neuroendocrine cell fate in the lungs, an archetypal process for cell fate decisions orchestrated by Notch signaling that has remained poorly understood at the molecular level. Using intratumoral heterogeneity in small-cell lung cancer as a tractable model system, we uncovered a role for the transcriptional regulators REST and YAP as promoters of the neuroendocrine to non-neuroendocrine transition. We further identified the specific neuroendocrine gene programs repressed by REST downstream of Notch in this process. Importantly, we validated the importance of REST and YAP in neuroendocrine to non-neuroendocrine cell fate switches in both developmental and tissue repair processes in the lungs. Altogether, these experiments identify conserved roles for REST and YAP in Notch-driven inhibition of the neuroendocrine cell fate in embryonic lungs, adult lungs, and lung cancer.