Pelota (Pelo) is an evolutionarily conserved gene, and its deficiency in Drosophila affects both male and female fertility. In mice, genetic ablation of Pelo leads to embryonic lethality at the early implantation stage as a result of the impaired development of extra-embryonic endoderm (ExEn). To define the consequences of Pelo deletion on male germ cells, we temporally induced deletion of the gene at both embryonic and postnatal stages. Deletion of Pelo in adult mice resulted in a complete loss of whole-germ cell lineages after 45 days of deletion. The absence of newly emerging spermatogenic cycles in mutants confirmed that spermatogonial stem cells (SSCs) were unable to maintain spermatogenesis in the absence of PELO protein. However, germ cells beyond the undifferentiated SSC stage were capable of completing spermatogenesis and producing spermatozoa, even in the absence of PELO. Following the deletion of Pelo during embryonic development, we found that although PELO is dispensable for maintaining gonocytes, it is necessary for the transition of gonocytes to SSCs. Immunohistological and protein analyses revealed the attenuation of FOXO1 transcriptional activity, which induces the expression of many SSC self-renewal genes. The decreased transcriptional activity of FOXO1 in mutant testes was due to enhanced activity of the PI3K/AKT signaling pathway, which led to phosphorylation and cytoplasmic sequestration of FOXO1. These results suggest that PELO negatively regulates the PI3K/AKT pathway and that the enhanced activity of PI3K/AKT and subsequent FOXO1 inhibition are responsible for the impaired development of SSCs in mutant testes.