PIWI proteins have essential roles in germ cells and stem cell lineages. In Drosophila , Piwi is required in somatic niche cells and germline stem cells (GSCs) for GSC self-renewal and differentiation. Whether and how other PIWI proteins are involved in GSC biology remains unknown. Here, we show that Aubergine (Aub), another PIWI protein, is intrinsically required in GSCs for their self-renewal and differentiation. Aub loading with piRNAs is essential for these functions. The major role of Aub is in self-renewal and depends on mRNA regulation. We identify the Cbl proto-oncogene, a regulator of mammalian hematopoietic stem cells, as a novel GSC differentiation factor. Aub represses Cbl mRNA translation for GSC self-renewal, and does so through recruitment of the CCR4-NOT complex. This study reveals the role of piRNAs and PIWI proteins in translational repression for stem cell homeostasis and highlights piRNAs as major post-transcriptional regulators in key developmental decisions.