Piwi proteins associate with piRNAs and functions in epigenetic programming, post-transcriptional regulation, transposon silencing, and germline development. However, it is not known whether the diverse functions of these proteins are molecularly separable. Here we report that Piwi interacts with Tudor-SN (Tudor staphylococcal nuclease, TSN) antagonistically in regulating spermatogenesis but synergistically in silencing transposons. However, it is not required for piRNA biogenesis. TSN is known to participate in diverse molecular functions such as RNAi, degradation of hyper-edited miRNAs, and spliceosome assembly. We show that TSN colocalizes with Piwi in primordial germ cells (PGCs) and embryonic somatic cells. In adult ovaries and testes, TSN is ubiquitously expressed and enriched in the cytoplasm of both germline and somatic cells. The tsn mutants display a higher mitotic index of spermatogonia, accumulation of spermatocytes, defects in meiotic cytokinesis, a decreased number of spermatids, and eventually reduced male fertility. Germline-specific TSN-expression analysis demonstrates that this function is germline-dependent. Different from other known Piwi interters, TSN represses Piwi expression at both protein and mRNA levels. Furthermore, reducing piwi expression in the germline rescues tsn mutant phenotype in a dosage-dependent manner, demonstrating that Piwi and TSN interact antagonistically in germ cells to regulate spermatogenesis. However, the tsn deficiency has little, if any, impact on piRNA biogenesis but displays a synergistic effect with piwi mutants in transposon de-silencing. Our results reveal the biological function of TSN and its contrasting modes of interaction with Piwi in spermatogenesis, transposon silencing, and piRNA biogenesis.