Drosophila ovarian germline stem cells (GSCs) are a powerful model for stem cell research. In this study, we use single-cell RNA sequencing (scRNA-seq), an RNAi screen and bioinformatic analysis, to identify genes involved in germ cell differentiation, including 34 genes with upregulated expression during early germ cell development and 19 genes that may regulate germ cell differentiation. Among these, a gene we have named eggplant (eggpl) is highly expressed in GSCs and downregulated in early daughter cells. RNAi knockdown of eggpl causes germ cell proliferation and differentiation defects. In flies fed a rich yeast diet, the expression of eggpl is significantly lower and knockdown or knockout of eggpl phenocopies a rich diet. In addition, eggpl knockdown suppresses the reduction in germ cell proliferation caused by inhibition of the insulin effector PI3K. These findings suggest that downregulation of eggpl links nutritional status to germ cell proliferation and differentiation. Collectively, this study provides new insights into the signaling networks that regulate early germ cell development and identifies eggpl as a key player in this process.