Understanding how stem cells are maintained in their microenvironment (the niche) is vital for their application in regenerative medicine. Studies of Drosophila male germline stem cells (GSCs) have served as a paradigm in niche-stem cell biology. It is known that the BMP and JAK-STAT pathways are necessary for the maintenance of GSCs in the testis (Kawase et al., 2004; Kiger et al., 2001; Schulz et al., 2004; Shivdasani and Ingham, 2003; Tulina and Matunis, 2001). However, our recent work strongly suggests that BMP signaling is the primary pathway leading to GSC self-renewal (Leatherman and DiNardo, 2010). Here we show that magu controls GSC maintenance by modulating the BMP pathway. We found that magu was specifically expressed from hub cells, and accumulated at the testis tip. Testes from magu mutants exhibited a reduced number of GSCs, yet maintained a normal population of somatic stem cells and hub cells. Additionally, BMP pathway activity was reduced, whereas JAK-STAT activation was retained in mutant testes. Finally, GSC loss caused by the magu mutation could be suppressed by overactivating the BMP pathway in the germline.