Piwi-interacting RNAs (piRNAs) engage Piwi proteins to suppress transposons and nonself nucleic acids and maintain genome integrity and are essential for fertility in a variety of organisms. In Caenorhabditis elegans, most piRNA precursors are transcribed from two genomic clusters that contain thousands of individual piRNA transcription units. While a few genes have been shown to be required for piRNA biogenesis, the mechanism of piRNA transcription remains elusive. Here we used functional proteomics approaches to identify an upstream sequence transcription complex (USTC) that is essential for piRNA biogenesis. The USTC contains piRNA silencing-defective 1 (PRDE-1), SNPC-4, twenty-one-U fouled-up 4 (TOFU-4), and TOFU-5. The USTC forms unique piRNA foci in germline nuclei and coats the piRNA cluster genomic loci. USTC factors associate with the Ruby motif just upstream of type I piRNA genes. USTC factors are also mutually dependent for binding to the piRNA clusters and forming the piRNA foci. Interestingly, USTC components bind differentially to piRNAs in the clusters and other noncoding RNA genes. These results reveal the USTC as a striking example of the repurposing of a general transcription factor complex to aid in genome defense against transposons.