Soma-germline interactions play conserved essential roles in regulating cell proliferation, differentiation, patterning and homeostasis in the gonad. In the Drosophila testis, secreted signalling molecules of the JAK-STAT, Hedgehog, BMP and EGF pathways are used to mediate soma-germline communication. Here, we demonstrate that gap junctions may also mediate direct, bi-directional signalling between the soma and germ line. When gap junctions between the soma and germ line are disrupted, germline differentiation is blocked and germline stem cells are not maintained. In the soma, gap junctions are required to regulate proliferation and differentiation. Localization and RNAi-mediated knockdown studies reveal that gap junctions in the fly testis are heterotypic channels containing Zpg (Inx4) and Inx2 on the germ line and the soma side, respectively. Overall, our results show that bi-directional gap junction-mediated signalling is essential to coordinate the soma and germ line to ensure proper spermatogenesis in Drosophila. Moreover, we show that stem cell maintenance and differentiation in the testis are directed by gap junction-derived cues.