The Bicaudal-C (Bic-C) gene of Drosophila melanogaster is required for correct targeting of the migrating anterior follicle cells and for specifying anterior position. Females lacking any wild type copies of Bic-C produce only eggshells open at the anterior end, because of the failure of the columnar follicle cells to migrate in the correct position at the nurse cell--oocyte boundary. Embryos which develop from eggs produced in females with only one wild type copy of Bic-C show defects in anterior patterning and an abnormal persistence of oskar RNA in anterior regions. We cloned Bic-C and found that, in ovaries, Bic-C RNA is expressed only in germline cells. Bic-C RNA is localized to the oocyte in early oogenesis, and later concentrates at its anterior cortex. The Bic-C protein includes five KH domains similar to those found in the human fragile-X protein FMR1. Alteration of a highly conserved KH domain codon by mutation abrogates in vivo Bic-C function. These results suggest roles for the Bic-C protein in localizing RNAs and in intercellular signaling.