Germline stem cells continually produce sperm in vertebrate testes, whereas there is no direct evidence showing that germline stem cells are present in adult vertebrate ovaries. By using transgenic methods and clonal analysis, we identified germline stem cells that supported oogenesis and the production of offspring in the ovaries of adult medaka fish. Early-stage germ cells were localized in clusters along interwoven threadlike cords of sox9b-expressing somatic cells (termed germinal cradles) where the germ cells developed. Germline stem cells gave rise to germ cells that divided to produce cysts, which then underwent cell death or separated to form follicles. Our results provide insight into the germline stem cell biology of medaka and provide a model system for studying vertebrate stem cell niches.