The piRNA pathway is an adaptive mechanism that maintains genome stability by repression of selfish genomic elements. In the male germline of Drosophila melanogaster repression of Stellate genes by piRNAs generated from Supressor of Stellate (Su(Ste)) locus is required for male fertility, but both Su(Ste) piRNAs and their targets are absent in other Drosophila species. We found that D. melanogaster genome contains multiple X-linked non-coding genomic repeats that have sequence similarity to the protein-coding host gene vasa. In the male germline, these vasa-related AT-chX repeats produce abundant piRNAs that are antisense to vasa; however, vasa mRNA escapes silencing due to imperfect complementarity to AT-chX piRNAs. Unexpectedly, we discovered AT-chX piRNAs target vasa of Drosophila mauritiana in the testes of interspecies hybrids. In the majority of hybrid flies, the testes were strongly reduced in size and germline content. A minority of hybrids maintained wild-type array of premeiotic germ cells in the testes, but in them harmful Stellate genes were derepressed due to the absence of Su(Ste) piRNAs, and meiotic failures were observed. Thus, the piRNA pathway contributes to reproductive isolation between D. melanogaster and closely related species, causing hybrid male sterility via misregulation of two different host protein factors.