The timing of Drosophila egg chamber development is controlled by a germline Delta signal that activates Notch in the follicle cells to induce them to cease proliferation and differentiate. Here, we report that follicle cells lacking the RNA-binding protein IMP go through one extra division owing to a delay in the Delta-dependent S2 cleavage of Notch. The timing of Notch activation has previously been shown to be controlled by cis-inhibition by Delta in the follicle cells, which is relieved when the miRNA pathway represses Delta expression. imp mutants are epistatic to Delta mutants and give an additive phenotype with belle and Dicer-1 mutants, indicating that IMP functions independently of both cis-inhibition and the miRNA pathway. We find that the imp phenotype is rescued by overexpression of Kuzbanian, the metalloprotease that mediates the Notch S2 cleavage. Furthermore, Kuzbanian is not enriched at the apical membrane in imp mutants, accumulating instead in late endosomes. Thus, IMP regulates Notch signalling by controlling the localisation of Kuzbanian to the apical domain, where Notch cleavage occurs, revealing a novel regulatory step in the Notch pathway.