Dividing stem cells can give rise to two types of daughter cells; self-renewing cells that have virtually the same properties as the parent cell, and differentiating cells that will eventually form part of a tissue. The Caenorhabditis elegans germ line serves as a model to study how the balance between these two types of daughter cells is maintained. A mutation in teg-4 causes over-proliferation of the stem cells, thereby disrupting the balance between proliferation and differentiation. We have cloned teg-4 and found it to encode a protein homologous to the highly conserved splicing factor subunit 3 of SF3b. Our allele of teg-4 partially reduces TEG-4 function. In an effort to determine how teg-4 functions in controlling stem cell proliferation, we have performed genetic epistasis analysis with known factors controlling stem cell proliferation. We found that teg-4 is synthetic tumorous with genes in both major redundant genetic pathways that function downstream of GLP-1/Notch signaling to control the balance between proliferation and differentiation. Therefore, teg-4 is unlikely to function specifically in either of these two genetic pathways. Further, the synthetic tumorous phenotype seen with one of the genes from these pathways is epistatic to glp-1, indicating that teg-4 functions downstream of glp-1, likely as a positive regulator of meiotic entry. We propose that a reduction in teg-4 activity reduces the splicing efficiency of targets involved in controlling the balance between proliferation and differentiation. This results in a shift in the balance towards proliferation, eventually forming a germline tumor.