Production of specialized cells from precursors depends on a tightly regulated sequence of proliferation and differentiation steps. In the gonad of Drosophila melanogaster, the daughters of germ line stem cells (GSC) go through precisely four rounds of transit amplification divisions to produce clusters of 16 interconnected germ line cells before entering a stereotypic differentiation cascade. Here we show that animals harbouring a transposon insertion in the center of the complex nucleoporin98-96 (nup98-96) locus had severe defects in the early steps of this developmental program, ultimately leading to germ cell loss and sterility. A phenotypic analysis indicated that flies carrying the transposon insertion, designated nup98-96(2288), had dramatically reduced numbers of germ line cells. In contrast to controls, mutant testes contained many solitary germ line cells that had committed to differentiation as well as abnormally small clusters of two, four or eight differentiating germ line cells. This indicates that mutant GSCs rather differentiated than self-renewed, and that these GSCs and their daughters initiated the differentiation cascade after zero, or less than four rounds of amplification divisions. This phenotype remained unaffected by hyper-activation of signalling pathways that normally result in excessive proliferation of GSCs and their daughters. Expression of wildtype nup98-96 specifically in the germ line cells of mutant animals fully restored development of the GSC lineage, demonstrating that the effect of the mutation is cell-autonomous. Nucleoporins are the structural components of the nucleopore and have also been implicated in transcriptional regulation of specific target genes. The nuclear envelopes of germ cells and general nucleocytoplasmic transport in nup98-96 mutant animals appeared normal, leading us to propose that Drosophila nup98-96 mediates the transport or transcription of targets required for the developmental timing between amplification and differentiation.