Interactions between the soma and the germline are a conserved feature of spermatogenesis throughout the animal kingdom. In this report, we find that the transcription factors eyes absent (eya) and sine oculis (so), previously shown to play major roles during eye development [Cell 91 (1997), 881] are each required in the somatic cyst cells of the testis for proper Drosophila spermatocyte development. eya mutant testes exhibit degenerating young spermatocytes. Mosaic analysis reveals a somatic requirement for both eya and so, in that neither gene is required in the germline for spermatocyte development. Immunolocalization analysis supports this somatic role, since both proteins are localized within cyst cell nuclei as spermatocytes differentiate from amplifying spermatogonia. Using antibodies against known cyst cell markers, we demonstrate that cysts of degenerating spermatocytes in eya mutant testes are encysted, ruling out a role for eya in cyst cell viability. Finally, we have uncovered a genetic interaction between eya and so in the testis, suggesting that, as in the eye, eya and so may form a transcription complex responsible for the activation of target genes involved in cyst cell differentiation and spermatocyte development.