Azoospermia is a high risk factor for testicular germ cell tumors, whose underlying molecular mechanisms remain unknown. In a genome-wide association study to identify novel loci associated with human non-obstructive azoospermia (NOA), we uncovered a single nucleotide polymorphism (rs1887102, P= 2.60× 10− 7) in a human gene FOXN3. FOXN3 is an evolutionarily conserved gene. We used Drosophila melanogaster as a model system to test whether CHES-1-like, the Drosophila FOXN3 ortholog, is required for male fertility. CHES-1-like knockout flies are viable and fertile, and show no defects in spermatogenesis. However, ectopic expression of CHES-1-like in germ cells significantly reduced male fertility. With CHES-1-like overexpression, spermatogonia fail to differentiate after four rounds of mitotic division, but continue to divide to form tumor like structures. In these testes, expression levels of differentiation factor, Bam, were reduced, but the expression region of Bam was expanded. Further reduced Bam expression in CHES-1-like expressing testes exhibited enhanced tumor-like structure formation. The expression of daughters against dpp (dad), a downstream gene of dpp signaling, was upregulated by CHES-1-like expression in testes. We found that CHES-1-like could directly bind to the dpp promoter. We propose a model that CHES-1-like overexpression in germ cells activates dpp expression, inhibits spermatocyte differentiation, and finally leads to germ cell tumors.