The proliferation/differentiation balance of stem and progenitor cell populations must respond to the physiological needs of the organism [see 1, 2]. Mechanisms underlying this plasticity are not well understood. The C. elegans germ line provides a tractable system to study the influence of the environment on progenitor cells (stem cells and their proliferative progeny). Germline progenitors accumulate during larval stages to form an adult pool from which gametes are produced. Notch pathway signaling from the distal tip cell (DTC) niche to the germ line maintains the progenitor pool [see 3, 4, 5], and the larval germline cell cycle is boosted by insulin/IGF-like receptor signaling [6]. Here we show that, independent of its role in the dauer decision, TGFβ regulates the balance of proliferation versus differentiation in the C. elegans germ line in response to sensory cues that report population density and food abundance. Ciliated ASI sensory neurons are required for TGFβ-mediated expansion of the larval germline progenitor pool, and the TGFβ receptor pathway acts in the germline stem cell niche. TGFβ signaling thereby couples germline development to the quality of the environment, providing a novel cellular and molecular mechanism linking sensory experience of the environment to reproduction.