Ribosome biogenesis drives cell growth and proliferation, but mechanisms that modulate this process within specific lineages remain poorly understood. Here, we identify a Drosophila RNA polymerase I (Pol I) regulatory complex composed of Under-developed (Udd), TAF1B, and a TAF1C-like factor. Disruption of udd or TAF1B results in reduced ovarian germline stem cell (GSC) proliferation. Female GSCs display high levels of ribosomal RNA (rRNA) transcription, and Udd becomes enriched in GSCs relative to their differentiating daughters. Increasing Pol I transcription delays differentiation, whereas reducing rRNA production induces both morphological changes that accompany multicellular cyst formation and specific decreased expression of the bone morphogenetic protein (BMP) pathway component Mad. These findings demonstrate that modulating rRNA synthesis fosters changes in the cell fate, growth, and proliferation of female Drosophila GSCs and their daughters.