Cell-cell interactions in the Drosophila ovary play a crucial role in the establishment of dorsoventral polarity of both the egg shell and the future embryo. Torpedo/DER (top/DER), a homolog of the vertebrate epidermal growth factor receptor, is required for this signaling process in the somatic cells of the ovary. In contrast, gurken (grk), which also functions in this pathway, is required in the germline. We cloned the grk gene and found that it encodes a TGF alpha-like protein. Grk is, therefore, likely to be a ligand of top/DER, activating the receptor during oogenesis. During oogenesis, the grk transcript becomes asymmetrically localized to the dorsal corner of the oocyte. We propose that the dorsal localization of grk RNA results in a spatially restricted ligand that asymmetrically activates the receptor.