Stem cells are maintained and retain their capacity to continue dividing because of the influence of a niche. Although niches are important to maintain "stemness" in a wide variety of tissues, control of these niches is poorly understood. The Drosophila germline stem cells (GSCs) reside in a somatic cell niche. We show that Notch activation can induce the expression of niche-cell markers even in an adult fly; overexpression of Delta in the germline, or activated Notch in the somatic cells, results in extra niche cells, up to 10-fold over the normal number. In turn, these ectopic niche cells induce ectopic GSCs. Conversely, when GCSs do not produce functional Notch ligands, Delta and Serrate, the TGF-beta pathway is not activated in the GSCs, and they differentiate and subsequently leave the niche. Importantly, clonal analysis reveals that the receiving end of the Notch pathway is required in the somatic cells. These data show that a feedback loop exists between the stem cells and niche cells. Demonstration that stem cells can contribute to niche function has far-reaching consequences for stem cell therapies and may provide insight into how cancer can spread throughout an organism via populations of cancer stem cells.