Only a small number of cells in adult tissues (the stem cells) possess the ability to self-renew at every cell division, while producing differentiating daughter cells to maintain tissue homeostasis for an organism's lifetime. The Drosophila ovary harbors three different types of stem cell populations (germline stem cell (GSC), somatic stem cell (SSC) and escort stem cell (ESC)) located in a simple anatomical structure known as germarium, rendering it one of the best model systems for studying stem cell biology due to reliable stem cell identification and available sophisticated genetic tools for manipulating gene functions. Particularly, the niche for the GSC is among the first and best studied ones, and studies on the GSC and its niche have made many unique contributions to a better understanding of relationships between stem cells and their niche. So far, both the GSC and the SSC have been shown to be regulated by extrinsic factors originating from their niche and intrinsic factors functioning within. Multiple signaling pathways are required for controlling GSC and SSC self-renewal and differentiation, which provide unique opportunities to investigate how multiple signals from the niche are interpreted in the stem cell. Since the Drosophila ovary contains three types of stem cells, it also provides outstanding opportunities to study how multiple stem cells in a given tissue work collaboratively to contribute to tissue function and maintenance. This review highlights recent major advances in studying Drosophila ovarian stem cells and also discusses future directions and challenges.