The niche controls stem cell self-renewal and progenitor differentiation for maintaining adult tissue homeostasis in various organisms. However, it remains unclear whether the niche is compartmentalized to control stem cell self-renewal and stepwise progeny differentiation. In the Drosophila ovary, inner germarial sheath (IGS) cells form a niche for controlling germline stem cell (GSC) progeny differentiation. In this study, we have identified four IGS subpopulations, which form linearly arranged niche compartments for controlling GSC maintenance and multi-step progeny differentiation. Single-cell analysis of the adult ovary has identified four IGS subpopulations (IGS1-IGS4), the identities and cellular locations of which have been further confirmed by fluorescent in situ hybridization. IGS1 and IGS2 physically interact with GSCs and mitotic cysts to control GSC maintenance and cyst formation, respectively, whereas IGS3 and IGS4 physically interact with 16-cell cysts to regulate meiosis, oocyte development, and cyst morphological change. Finally, one follicle cell progenitor population has also been transcriptionally defined for facilitating future studies on follicle stem cell regulation. Therefore, this study has structurally revealed that the niche is organized into multiple compartments for orchestrating stepwise adult stem cell development and has also provided useful resources and tools for further functional characterization of the niche in the future.