Chromatin packaging and modifications are important to define the identity of stem cells. How chromatin properties are retained over multiple cycles of stem cell replication, while generating differentiating progeny at the same time, remains a challenging question. The chromatin assembly factor CAF1 is a conserved histone chaperone, which assembles histones H3 and H4 onto newly synthesized DNA during replication and repair. Here, we have investigated the role of CAF1 in the maintenance of germline stem cells (GSCs) in ovaries. We depleted P180, the large subunit of CAF1, in germ cells and found that it was required in GSCs to maintain their identity. In the absence of P180, GSCs still harbor stem cell properties but concomitantly express markers of differentiation. In addition, P180-depleted germ cells exhibit elevated levels of DNA damage and de-repression of the transposable I element. These DNA damages activate p53- and Chk2-dependent checkpoints pathways, leading to cell death and female sterility. Altogether, our work demonstrates that chromatin dynamics mediated by CAF1 play an important role in both the regulation of stem cell identity and genome integrity.