Each Drosophila ovariole has three independent sets of stem cells: germ-line stem cells (GSCs) and escort stem cells, located at the anterior tip of the germarium, and somatic stem cells (SSCs), located adjacent to the newly formed 16-cell cysts. Decapentaplegic (Dpp) is required to maintain the anterior stem cells, whereas Hedgehog is required for maintenance and cell division of the SCCs. In an effort to establish a new in vitro system to analyze intrinsic and extrinsic factors regulating the division and differentiation of GSCs of Drosophila, we tested various culture conditions for growing GSCs, derived from bag of marbles (bam) mutant ovaries. We have shown that bam(-) GSCs can be maintained and promoted to divide in vitro in media containing Dpp. These cells retain the morphological features of GSCs, i.e., expression of Vasa and Nanos and spectrosomes, even after several months of culture. Somatic cells are induced to grow in culture by the presence of sonic Hedgehog. The somatic cells produce Dpp. GSCs associate with the somatic cells via DE-cadherin, features that are also prominent at the niche of a normal germarium. Finally, we have established stable cell cultures consisting of GSCs and sheets of somatic cells, which are dependent on the addition of fly extract. A somatic cell line, lacking GSCs, has also been established. These cells are thought to be descendants of SCCs. Our in vitro system may provide the opportunity to manipulate GSCs genetically and to analyze the interaction of germ-line stem cells and soma.