Processing bodies (P bodies) are conserved mRNA-protein (mRNP) granules that are thought to be cytoplasmic centers for mRNA repression and degradation. However, their specific functions in vivo remain poorly understood. We find that repressed maternal mRNAs and their regulators localize to P body-like mRNP granules in the Caenorhabditis elegans germ line. Surprisingly, several distinct types of regulated granules form during oocyte and embryo development. 3' untranslated region elements direct mRNA targeting to one of these granule classes. The P body factor CAR-1/Rap55 promotes association of repressed mRNA with granules and contributes to repression of Notch/glp-1 mRNA. However, CAR-1 controls Notch/glp-1 only during late oogenesis, where it functions with the RNA-binding regulators PUF-5, PUF-6, and PUF-7. The P body protein CGH-1/Rck/Dhh1 differs from CAR-1 in control of granule morphology and promotes mRNP stability in arrested oocytes. Therefore, a system of diverse and regulated RNP granules elicits stage-specific functions that ensure proper mRNA control during early development.