Specialized microenvironments called niches help maintain stem cells in an undifferentiated and self-renewing state. The existence of niches has long been predicted from mammalian studies, but identifying stem cells in their native environments in vivo has remained a challenge in most vertebrates. Many of the mechanistic insights into how niches regulate stem cell maintenance have been obtained using invertebrate models such as Drosophila. Here, we focus on the Drosophila ovarian germline stem cell niche and review recent studies that have begun to reveal how intricate crosstalk between various signaling pathways regulates stem cell maintenance, how the extracellular matrix modulates the signaling output of the niche and how epigenetic programming influences cell development and function both inside and outside the niche to ensure proper tissue homeostasis. These insights will probably inform the study of mammalian niches and how their malfunction contributes to human disease.