The underlying goal of neuroscience research is to understand how the nervous system functions to bring about behavior. A detailed map of neural circuits is required for scientists to tackle this question. To this purpose, we developed a synthetic and genetically-encoded system, TRanscellular ACtivation of Transcription (TRACT) to monitor cell-cell contact. Upon ligand-receptor interaction at sites of cell-cell contact, the transmembrane domain of an engineered Notch receptor is cleaved by intramembrane proteolysis and releases a fragment that regulates transcription in the receptor-expressing cell. We demonstrate that in cultured cells, the synthetic receptor can be activated to drive reporter gene expression by co-incubation with ligand-expressing cell or by growth on ligand-coated surfaces. We further show that TRACT can detect interactions between neurons and glia in the Drosophila brain; expressing the ligand in spatially-restricted subsets of neurons leads to transcription of a reporter in the glial cells that interact with those neurons. To optimize TRACT for neural tracing, we attempted to target the synthetic receptor to post-synaptic sites by fusion with the intracellular domain of Drosophila neuroligin2. However, this modification only facilitate the receptor to be localized homogeneously throughout the neurites. The induction data of the modified receptor shows that the new receptor has better sensitivity compared to the original receptor, but the ligand-receptor interaction still happened at non-synaptic sites of membrane contact. To further target the ligand to pre-synaptic sites, we fused the ligand to different pre-synaptic markers. We found the one fused with synaptobrevin is likely located at axon terminals, but only able to trigger moderate induction. Therefore, more examinations are required to further characterize the capability of this ligand. In summary, TRACT is useful for monitoring cell-cell interactions in animals and could also be used to genetically manipulate cells based on contact. Moreover, we believe that proper targeting of the ligand to synaptic sites will improve the specificity of TRACT for synaptic connections in the future.