N-terminal arginine (NTR) methylation is a conserved feature of PIWI proteins, which are central components of the PIWI-interacting RNA (piRNA) pathway. The significance and precise function of PIWI NTR methylation in mammals remains unknown. In mice, PIWI NTRs bind Tudor domain containing proteins (TDRDs) that have essential roles in piRNA biogenesis and the formation of the chromatoid body. Using mouse MIWI (PIWIL1) as paradigm, we demonstrate that the NTRs are essential for spermatogenesis through the regulation of transposons and gene expression. Surprisingly, the loss of TDRD5 and TDRKH interaction with MIWI results in defective piRNA amplification, rather than an expected failure of piRNA biogenesis. We find that piRNA amplification is necessary for both transposon control and for sustaining levels of select, nonconserved, pachytene piRNAs that target specific mRNAs required for spermatogenesis. Our findings support the notion that the vast majority of pachytene piRNAs are dispensable, acting as autonomous genetic elements that rely for propagation on MIWI piRNA amplification. MIWI-NTRs also mediate interactions with TDRD6 that are necessary for chromatoid body compaction. Furthermore, MIWI-NTRs promote stabilization of spermiogenic transcripts that drive nuclear compaction, which is essential for sperm formation. In summary, the NTRs underpin the diversification of MIWI protein function.