Progressive loss of ovarian estrogen (E2) production is a hallmark feature of, if not a driving force behind, reproductive aging and the menopause. Recent genetic studies in mice have shown that female germline or oogonial stem cells (OSCs) contribute to maintenance of adult ovarian function and fertility under physiological conditions through support of de-novo oogenesis. Here we show that mouse OSCs express E2 receptor-α (ERα). In the presence of E2, ERα interacts with the stimulated by retinoic acid gene 8 (Stra8) promoter to drive Stra8 expression followed by oogenesis. Treatment of mice with E2 in vivo increases Stra8 expression and oogenesis, and these effects are nullified by ERα (Esr1), but not ERβ (Esr2), gene disruption. Although mice lacking ERα are born with a normal quota of oocytes, ERα-deficient females develop premature ovarian insufficiency in adulthood due to impaired oogenesis. Lastly, mice treated with reversible ER antagonists show a loss of Stra8 expression and oocyte numbers; however, both endpoints rebound to control levels after ceasing drug treatment. These findings establish a key physiological role for E2-ERα signaling in promoting OSC differentiation as a potential mechanism to maintain adequate numbers of ovarian follicles during reproductive life.