In Drosophila, primordial germ cells (PGCs) are set aside from somatic cells and subsequently migrate through the embryo and associate with somatic gonadal cells to form the embryonic gonad. During larval stages, PGCs proliferate in the female gonad, and a subset of PGCs are selected at late larval stages to become germ line stem cells (GSCs), the source of continuous egg production throughout adulthood. However, the degree of similarity between PGCs and the self-renewing GSCs is unclear. Here we show that many of the genes that are required for GSC maintenance in adults are also required to prevent precocious differentiation of PGCs within the larval ovary. We show that following overexpression of the GSC-differentiation gene bag of marbles (bam), PGCs differentiate to form cysts without becoming GSCs. Furthermore, PGCs that are mutant for nanos (nos), pumilio (pum) or for signaling components of the decapentaplegic (dpp) pathway also differentiate. The similarity in the genes necessary for GSC maintenance and the repression of PGC differentiation suggest that PGCs and GSCs may be functionally equivalent and that the larval gonad functions as a "PGC niche".