Drosophila oocytes develop within cysts containing 16 cells that are interconnected by cytoplasmic bridges. Although the cysts are syncytial, the 16 cells differentiate to form a single oocyte and 15 nurse cells, and several mRNAs that are synthesized in the nurse cells accumulate specifically in the oocyte. To gain insight into the mechanisms that generate the cytoplasmic asymmetry within these cysts, we have examined cytoskeletal organization during oocyte differentiation. Shortly after formation of the 16 cell cysts, a prominent microtubule organizing center (MTOC) is established within the syncytial cytoplasm, and at the time the oocyte is determined, a single microtubule cytoskeleton connects the oocyte with the remaining 15 cells of each cyst. Recessive mutations at the Bicaudal-D (Bic-D) and egalitarian (egl) loci, which block oocyte differentiation, disrupt formation and maintenance of this polarized microtubule cytoskeleton. Microtubule assembly-inhibitors phenocopy these mutations, and prevent oocyte-specific accumulation of oskar, cyclin B and 65F mRNAs. We propose that formation of the polarized microtubule cytoskeleton is required for oocyte differentiation, and that this structure mediates the asymmetric accumulation of mRNAs within the syncytial cysts.