We previously discovered a germ cell-specific spermatogenesis and oogenesis basic helix-loop-helix transcription factor, Sohlh2. We generated Sohlh2-deficient mice to understand physiologic consequences of Sohlh2 deletion. We discovered that Sohlh2-knockout adult female mice are infertile due to lack of ovarian follicles. Sohlh2-deficient ovaries can form primordial follicles and, despite limited oocyte growth, do not differentiate surrounding granulosa cells into cuboidal and multilayered structures. Oocytes are rapidly lost in Sohlh2-deficient ovaries, and few are present by 14 days of postnatal life. However, the primordial oocytes are abnormal at the molecular level because they misexpress numerous germ cell- and oocyte-specific genes, including Sohlh1, Nobox, Figla, Gdf9, Pou5f1, Zp1, Zp3, Kit, Oosp1, Nlrp14, H1foo, and Stra8. Our findings show that Sohlh2 is a critical factor for maintenance and differentiation of the oocyte during early oogenesis.