The (ovarian tumor) otu gene resides at 23.2 on the genetic map of the X chromosome and near 7F1 on the cytological map. This germ line-expressed locus behaves as if it encodes a gene product which is required during certain steps in the transformation of oogonia into functional oocytes. On the basis of their ovarian morphologies 17 ethyl methane sulfonate (EMS)-induced mutants have been distributed among three developmental classes as follows: quiescent (eight), oncogenic (four), and differentiated (five). The otu13 and otu14 alleles interact to yield fertile females, and many other heteroallelic combinations show partial complementation. Since many mutant alleles interact beneficially, the functional product of the otu gene may be a multimer. We conclude, from an analysis of heteroallelic interactions and dosage effects, that the abnormal phenotypes observed are graded consequences of reduced levels of functional gene product and that the minimum concentration required for development increases as oogenesis proceeds.