Establishment of the Drosophila dorsal-ventral axis depends upon the correct localization of gurken mRNA and protein within the oocyte. gurken mRNA becomes localized to the presumptive dorsal anterior region of the oocyte, but is synthesized in the adjoining nurse cells. Normal gurken localization requires the heterogeneous nuclear ribonucleoprotein Squid, which binds to the gurken 3' untranslated region. However, whether Squid functions in the nurse cells or the oocyte is unknown. To address this question, we generated genetic mosaics in which half of the nurse cells attached to a given oocyte are unable to produce Squid. In these mosaics, gurken mRNA is localized normally but ectopically translated during the dorsal anterior localization process, even though the oocyte contains abundant Squid produced by the wild type nurse cells. These data indicate that translational repression of gurken mRNA requires Squid function in the nurse cells. We propose that Squid interacts with gurken mRNA in the nurse cell nuclei and, together with other factors, maintains gurken in a translationally silent state during its transport to the dorsal anterior region of the oocyte. This translational repression is not required for gurken mRNA localization, indicating that the information repressing translation is separable from that regulating localization.