Enzymes of the membrane-bound O-acyltransferase (MBOAT) family add fatty acyl chains to a diverse range of protein and lipid substrates. A chromosomal translocation disrupting human MBOAT1 results in a novel syndrome characterized by male sterility and brachydactyly. We have found that the Drosophila homologues of MBOAT1, Oysgedart (Oys), Nessy (Nes), and Farjavit (Frj), are lysophospholipid acyltransferases. When expressed in yeast, these MBOATs esterify specific lysophospholipids preferentially with unsaturated fatty acids. Generating null mutations for each gene allowed us to identify redundant functions for Oys and Nes in two distinct aspects of Drosophila germ cell development. Embryos lacking both oys and nes show defects in the ability of germ cells to migrate into the mesoderm, a process guided by lipid signals. In addition, oys nes double mutant adult males are sterile due to specific defects in spermatid individualization. oys nes mutant testes, as well as single, double, and triple mutant whole adult animals, show an increase in the saturated fatty acid content of several phospholipid species. Our findings suggest that lysophospholipid acyltransferase activity is essential for germline development and could provide a mechanistic explanation for the etiology of the human MBOAT1 mutation.