Nuclear envelope proteins play important roles in chromatin organization, gene regulation, and signal transduction; however, the physiological role of these proteins remains elusive. We found that otefin (ote), which encodes a nuclear lamin-binding protein [corrected], is essential for germline stem cell (GSC) maintenance. We show that Ote, as an intrinsic factor, is both necessary and sufficient to regulate GSC fate. Furthermore, we demonstrate that ote is required for the Dpp/BMP signaling pathway to silence bam transcription. By structure-function analysis, we demonstrate that the nuclear membrane localization of Ote is essential for its role in GSC maintenance. Finally, we show that Ote physically interacts with Medea/Smad4 at the bam silencer element to regulate GSC fate. Thus, we demonstrate that specific nuclear membrane components mediate signal-dependent transcriptional effects to control stem cell behavior.