Little is known about the formation of germline cyst and the differentiation of oocyte within the cyst in vertebrates. In the majority of invertebrates in the initial stages of gametogenesis, male and female germ cells develop in full synchrony as a syncytia of interconnected cells called germline cysts (clusters, nests). Using electron microscopy, immunostaining and three-dimensional reconstruction, we were able to elucidate the process of cyst formation in the developing ovary of the vertebrate Xenopus laevis. We found that the germline cyst in Xenopus contains 16 cells that are similar in general architecture and molecular composition to the cyst in Drosophila. Nest cells are connected by cytoplasmic bridges that contain ring canal-like structures. The nest cells contain a structure similar to the Drosophila fusome that that is probably involved in anchoring of the centrioles and organization of the primary mitochondrial cloud (PMC) around the centriole. We also find that in contrast to other organisms, in Xenopus, apoptosis is a rare event within the developing ovary. Our studies indicate that the processes responsible for the formation of female germline cysts and the establishment of germ cell polarity are highly conserved between invertebrates and vertebrates. The dissimilarities between Drosophila and Xenopus and the uniqueness of each system probably evolved through modifications of the same fundamental design of the germline cyst.