Germ cells frequently develop in syncytial clusters. We are using molecular genetic approaches to the formation of these clusters in Drosophila as a paradigm for cellular differentiation. The genes described in this paper act during an initial step of cluster formation (bag-of-marbles gene [bam]) and near the end of syncytial divisions (orb gene). The results presented suggest that the bam gene product is required for the four incomplete cytokineses that characterize the initial stages of cluster formation. The orb gene, previously identified as an ovarian-specific cDNA which predicts a new member of the RNA-recognition motif family of RNA-binding proteins, is required for both early and late stages of oogenesis. Strong orb alleles arrest egg development at the time of nurse cell-oocyte cyst formation; weak alleles disrupt formation of the anteroposterior and dorsoventral axes within the oocyte during late oogenesis. We postulate that Orb is a constituent of cytoplasmic multiprotein complexes which deliver RNA molecules to specific addresses within the oocyte.