piRNAs direct Piwi to repress transposons to maintain genome integrity in Drosophila ovarian somatic cells. piRNA maturation and association with Piwi occur at perinuclear Yb bodies, the centers of piRNA biogenesis. Here, we show that piRNA intermediates arising from the piRNA cluster flamenco (flam) concentrate into perinuclear foci adjacent to Yb bodies, termed Flam bodies. RNAi-based screening of piRNA factors revealed that Flam body formation depends on Yb, the core component of Yb bodies, while Piwi and another Yb body component Armitage are dispensable for the formation. Abolishment of the RNA-binding activity of Yb disrupts both Flam bodies and Yb bodies. Yb directly binds flam, but not neighboring protein-coding gene, transcripts. Thus, Yb integrates piRNA intermediates and piRNA processing factors selectively into Flam bodies and Yb bodies, respectively. We suggest that Yb is the most upstream, key factor in the cytoplasmic phase of the piRNA pathway in ovarian somatic cells.