In the Drosophila ovarian germline, BMP signals released by niche cells promote
germline stem cell (GSC) maintenance. Although BMP signaling is known to repress expression of a key differentiation factor, it remains unclear whether BMP-responsive transcription also contributes positively to GSC identity. Here, we identify the GSC transcriptome using RNA-seq, including the BMP-induced transcriptional network. Based on these data, we provide evidence that GSCs form two types of cellular projections. Genetic manipulation and live ex vivo imaging reveal that both classes of projection allow GSCs to access a reservoir of Dpp held away from the GSC-niche interface. Moreover, microtubule-rich projections, termed ‘cytocensors’, form downstream of BMP and have additional functionality, which is to attenuate BMP signaling. In this way cytocensors allow dynamic modulation of signal transduction to facilitate differentiation following GSC division. This ability of cytocensors to attenuate the signaling response expands the repertoire of functions associated with signaling projections.