Germ granules are large, non-membrane-bound, ribonucleoprotein (RNP) organelles found in the germ line cytoplasm of most, if not all, animals. The term germ granule is synonymous with the perinuclear nuage in mouse and human germ cells. These large RNPs are complexed with germ line-specific cytoplasmic structures such as the mitochondrial cloud, intermitochondrial cement, and chromatoid bodies. The widespread presence of germ granules across species and the associated germ line defects when germ granules are compromised suggest that germ granules are key determinants of the identity and special properties of germ cells. The nematode Caenorhabditis elegans has been a very fruitful model system for the study of germ granules, wherein they are referred to as P granules. P granules contain a heterogeneous mixture of RNAs and proteins. To date, most of the known germ granule proteins across species, and all of the known P granule components in C elegans, are associated with RNA metabolism, which suggests that a main function of germ granules is posttranscriptional regulation. Here we review P granule structure and localization, P granule composition, the genetic pathway of P granule assembly, and the consequences in the germ line when P granule components are lost. The findings in C elegans have important implications for the germ granule function during postnatal germ cell differentiation in mammals.