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Differentiation abnormalities are a hallmark of tuberous sclerosis complex (TSC) manifestations; however, the genesis of these abnormalities remains unclear. Here we report on mechanisms controlling the multi-lineage, early neuronal progenitor and neural stem-like cell characteristics of lymphangioleiomyomatosis (LAM) and angiomyolipoma cells. These mechanisms include the activation of a previously unreported Rheb-Notch-Rheb regulatory loop, in which the cyclic binding of Notch1 to the Notch-responsive elements (NREs) on the Rheb promoter is a key event. This binding induces the transactivation of Rheb. The identified NRE2 and NRE3 on the Rheb promoter are important to Notch-dependent promoter activity. Notch cooperates with Rheb to block cell differentiation via similar mechanisms in mouse models of TSC. Cell-specific loss of Tsc1 within nestin-expressing cells in adult mice leads to the formation of kidney cysts, renal intraepithelial neoplasia, and invasive papillary renal carcinoma. [ABSTRACT FROM AUTHOR]