Abstract In the fruit fly Drosophila melanogaster, two cells in a cyst of 16 interconnected cells have the potential to become the oocyte, but only one of these will assume an oocyte fate as the cysts transition through regions 2a and 2b of the germarium. The mechanism of specification depends on a polarized microtubule network, a dynein dependent Egl:BicD mRNA cargo complex, a special membranous structure called the fusome and its associated proteins, and the translational regulator orb. In this work, we have investigated the role of orb and the fusome in oocyte specification. We show here that specification is a stepwise process. Initially, orb mRNAs accumulate in the two pro-oocytes in close association with the fusome. This association is accompanied by the activation of the orb autoregulatory loop, generating high levels of Orb. Subsequently, orb mRNAs become enriched in only one of the pro-oocytes, the presumptive oocyte, and this is followed, with a delay, by Orb localization to the oocyte. We find that fusome association of orb mRNAs is essential for oocyte specification in the germarium, is mediated by the orb 3′ UTR, and requires Orb protein. We also show that the microtubule minus end binding protein Patronin functions downstream of orb in oocyte specification. Finally, in contrast to a previously proposed model for oocyte selection, we find that the choice of which pro-oocyte becomes the oocyte does not seem to be predetermined by the amount of fusome material in these two cells, but instead depends upon a competition for orb gene products.