The most prominent developmental regulators in oocytes are RNA-binding proteins (RNAbps) that assemble their targets into ribonucleoprotein granules where they are stored, transported and translationally regulated. RNA-binding protein of multiple splice forms 2, or Rbpms2, interacts with molecules that are essential to reproduction and egg patterning, including bucky ball, a key factor for Bb formation. Rbpms2 is localized to germ granules in primordial germ cells (PGCs) and to the Balbiani body (Bb) of oocytes, although the mechanisms regulating Rbpms2 localization to these structures are unknown. Using mutant Rbpms2 proteins, we show that Rbpms2 requires distinct protein domains to localize within germ cells and somatic cells. Accumulation and localization to subcellular compartments in the germline requires an intact RNA binding domain. Whereas in zebrafish somatic blastula cells, the conserved C-terminal domain promotes localization to the bipolar centrosomes/spindle. To investigate Rbpms2 functions, we mutated the duplicated and functionally redundant zebrafish rbpms2 genes. The gonads of rbpms2a;2b (rbpms2) mutants initially contain early oocytes, however definitive oogenesis ultimately fails during sexual differentiation and, rbpms2 mutants develop as fertile males. Unlike other genes that promote oogenesis, failure to maintain oocytes in rbpms2 mutants was not suppressed by mutation of Tp53. These findings reveal a novel and essential role for rbpms2 in oogenesis. Ultrastructural and immunohistochemical analyses revealed that rbpms2 is not required for the asymmetric accumulation of mitochondria and Buc protein in oocytes, however its absence resulted in formation of abnormal Buc aggregates and atypical electron-dense cytoplasmic inclusions. Our findings reveal novel and essential roles for rbpms2 in Buc organization and oocyte differentiation.