Oskar is one of seven Drosophila maternal-effect genes that are necessary for germline and abdomen formation. We have cloned oskar and show that oskar RNA is localized to the posterior pole of the oocyte when germ plasm forms. This polar distribution of oskar RNA is established during oogenesis in three phases: accumulation in the oocyte, transport toward the posterior, and finally maintenance at the posterior pole of the oocyte. The colocalization of oskar and nanos in wild-type and bicaudal embryos suggests that oskar directs localization of the posterior determinant nanos. We propose that the pole plasm is assembled stepwise and that continued interaction among its components is required for germ cell determination.