The germ cells of multicellular organisms protect their developmental potential through specialized mechanisms. A shared feature of germ cells from worms to humans is the presence of non-membrane-bound ribonucleoprotein organelles called germ granules. Depletion of germ granules in Caenorhabditis elegans (i.e., P granules) leads to sterility and in some germlines expression of the neuronal transgene unc-119::gfp and the muscle myosin MYO-3. Thus, P granules are hypothesized to maintain germ cell totipotency by preventing somatic development, although the mechanism by which P granules carry out this function is unknown. In this study, we performed transcriptome and single molecule RNA-FISH analyses of dissected P-granule-depleted gonads at different developmental stages. Our results demonstrate that P granules are necessary for adult germ cells to down-regulate spermatogenesis RNAs and to prevent the accumulation of numerous soma-specific RNAs. P-granule-depleted gonads that express the unc-119::gfp transgene also express many other genes involved in neuronal development and concomitantly lose expression of germ cell fate markers. Finally, we show that removal of either of two critical P-granule components, PGL-1 or GLH-1, is sufficient to cause germ cells to express UNC-119::GFP and MYO-3 and to display RNA accumulation defects similar to those observed after depletion of P granules. Our data identify P granules as critical modulators of the germline transcriptome and guardians of germ cell fate.