During Drosophila oogenesis, the Oskar (OSK) RNA-binding protein (RBP) determines the amount of germ plasm that assembles at the posterior pole of the oocyte. Here we identify the mechanisms that regulate the osk mRNA in the early embryo. We show that the Smaug (SMG) RBP is transported into the germ plasm of the early embryo where it accumulates in the germ granules. SMG binds to and represses translation of the osk mRNA itself as well as the bruno 1 (bru1) mRNA, which encodes an RBP that we show promotes germ plasm production. Loss of SMG or mutation of SMG's binding sites in the osk or bru1 mRNAs results in ectopic translation of these transcripts in the germ plasm and excess PGCs. SMG therefore triggers a post-transcriptional regulatory pathway that attenuates germ plasm synthesis in embryos, thus modulating the number of PGCs.