Ovarian germline stem cells (GSCs) of Drosophila melanogaster provide a valuable in vivo model to investigate how the adult stem cell identity is maintained and the differentiation of the daughter cells is regulated. GSCs are embedded into a specialized cellular microenvironment, the so-called stem cell niche. Besides the complex signaling interactions between the germ cells and the niche cells, the germ cell intrinsic mechanisms, such as chromatin regulation and transcriptional control, are also crucial in the decision about self-renewal and differentiation. The key differentiation regulator gene is the bag of marbles (bam), which is transcriptionally repressed in the GSCs and de-repressed in the differentiating daughter cell. Here, we show that the transcription factor MESR4 functions in the germline to promote GSC daughter differentiation. We find that the loss of MESR4 results in the accumulation of GSC daughter cells which fail to transit from the pre-cystoblast (pre-CB) to the differentiated cystoblast (CB) stage. The forced expression of bam can rescue this differentiation defect. By a series of epistasis experiments and a transcriptional analysis, we demonstrate that MESR4 positively regulates the transcription of bam. Our results suggest that lack of repression alone is not sufficient, but MESR4-mediated transcriptional activation is also required for bam expression.