Fertility and gamete reserves are maintained by asymmetric divisions of the germline stem cells to produce new stem cells or daughters that differentiate as gametes. Before entering meiosis, differentiating germ cells (GCs) of sexual animals typically undergo cystogenesis. This evolutionarily conserved process involves synchronous and incomplete mitotic divisions of a GC daughter (cystoblast) to generate sister cells connected by intercellular bridges that facilitate the exchange of materials to support rapid expansion of the gamete progenitor population. Here, we investigated cystogenesis in zebrafish and found that early GCs are connected by ring canals, and show that Deleted in azoospermia-like (Dazl), a conserved vertebrate RNA-binding protein (Rbp), is a regulator of this process. Analysis of dazl mutants revealed the essential role of Dazl in regulating incomplete cytokinesis, germline cyst formation and germline stem cell specification before the meiotic transition. Accordingly, dazl mutant GCs form defective ring canals, and ultimately remain as individual cells that fail to differentiate as meiocytes. In addition to promoting cystoblast divisions and meiotic entry, dazl is required for germline stem cell establishment and fertility.