Ovarian development and maintenance are poorly understood; however, diseases that affect these processes offer insight into their underlying mechanisms. We have recently identified a missense mutation in Nucleoporin107 (Nup107) as a cause of XX-ovarian dysgenesis (XX-OD), a rare genetic disorder characterized by underdeveloped and dysfunctional ovaries. The Nup107 protein is an essential component of the nuclear pore complex, which enables both active and passive nuclear transport. Intriguingly, while the XX-OD phenotype is specific and tissue-restricted, Nup107 is present in every nucleated cell. Modelling of the human mutation in Drosophila or knockdown (KD) of Nup107 in somatic, but not germline, gonadal cells resulted in ovarian-dysgenesis-like phenotype in female flies, while males remain fully fertile. Furthermore, larval gonads as well as adult ovaries compromised for Nup107 display phenotypes corresponding to BMP signalling dysregulation. Interestingly, the somatic sex determination gene, Double-sex (Dsx), was identified as a target of Nup107 in the transcriptomic analysis. The targeted KD of Dsx in somatic gonadal cells largely recapitulates the aberrant cellular and signaling aspects associated with Nup107 loss. Strikingly, Dsx overexpression is sufficient to rescue the Nup107 ovarian-dysgenesis phenotype, placing Nup107 upstream of Dsx. Our findings reveal that Nup107 mediates female sexual differentiation via Dsx, in turn controlling ovarian somatic niche function and proper germline differentiation via BMP signaling modulation. This concept has implications for clinical evaluation as human BMP signaling, and specifically the BMP15 and BMP receptor BMPR1B, are shown to be essential for female reproductive function.