Developmental patterning requires juxtacrine signaling in order to tightly coordinate the fates of neighboring cells. Recent work has shown that Notch and Delta, the canonical metazoan juxtacrine signaling receptor and ligand, mutually inactivate each other in the same cell. This cis-interaction generates mutually exclusive sending and receiving states in individual cells. It generally remains unclear, however, how this mutual inactivation and the resulting switching behavior can impact developmental patterning circuits. Here we address this question using mathematical modeling in the context of two canonical pattern formation processes: boundary formation and lateral inhibition. For boundary formation, in a model motivated by Drosophila wing vein patterning, we find that mutual inactivation allows sharp boundary formation across a broader range of parameters than models lacking mutual inactivation. This model with mutual inactivation also exhibits robustness to correlated gene expression perturbations. For lateral inhibition, we find that mutual inactivation speeds up patterning dynamics, relieves the need for cooperative regulatory interactions, and expands the range of parameter values that permit pattern formation, compared to canonical models. Furthermore, mutual inactivation enables a simple lateral inhibition circuit architecture which requires only a single downstream regulatory step. Both model systems show how mutual inactivation can facilitate robust fine-grained patterning processes that would be difficult to implement without it, by encoding a difference-promoting feedback within the signaling system itself. Together, these results provide a framework for analysis of more complex Notch-dependent developmental systems.