Germ cells contain non-membrane bound cytoplasmic organelles that help maintain germline integrity. In C. elegans they are called P granules; without them, germ cells undergo partial masculinization or aberrant differentiation. Many key P-granule components play roles in both exogenous and endogenous small RNA pathways. CSR-1 represents a small-RNA binding P-granule protein that antagonizes the accumulation of sperm-specific transcripts in developing oocytes. Loss of CSR-1 and its cofactors cause a very specific, enlarged P-granule phenotype. To better understand the function of CSR-1 in P granules, PGL-1::GFP expressing worms were mutated and screened for enlarged P granules. Ten mutants were isolated, including multiple alleles of csr-1 and its cofactors ego-1, ekl-1, and drh-3. Two alleles are in a novel gene now called elli-1 (enlarged germline granules). ELLI-1 becomes expressed in primordial germ cells during mid-embryogenesis and continues to be expressed in the adult germline. ELLI-1 forms cytoplasmic aggregates that do not co-localize with P granules, but instead accumulate in the syncytial cytoplasm of the adult germline. Genes encoding P-granule components, including those in the csr-1 pathway, are up-regulated in elli-1 mutants, as are several genes that promote RNAi. This overexpression of RNAi genes is reflected in the enhanced RNAi phenotype of elli-1 worms. Our results suggest that ELLI-1 is acting to modulate the accumulation of key transcripts required for exogenous and endogenous small RNA pathways.