RNase P is a conserved endonuclease that processes the 5' trailer of tRNA precursors. We have isolated mutations in Rpp30, a subunit of RNase P, and find that these induce complete sterility in Drosophila females. Here, we show that sterility is not due to a shortage of mature tRNAs, but that atrophied ovaries result from the activation of several DNA damage checkpoint proteins, including p53, Claspin, and Chk2. Indeed, we find that tRNA processing defects lead to increased replication stress and de-repression of transposable elements in mutant ovaries. We also report that transcription of major piRNA sources collapse in mutant germ cells and that this correlates with a decrease in heterochromatic H3K9me3 marks on the corresponding piRNA-producing loci. Our data thus link tRNA processing, DNA replication, and genome defense by small RNAs. This unexpected connection reveals constraints that could shape genome organization during evolution.