Nanos is one of the components of germ plasm and is evolutionarily conserved from flies to mammals. In medaka (Oryzias latipes), maternally provided nanos3 is essential for maintenance of primordial germ cells (PGCs). Here, we generated nanos3 loss-of-function mutants by using transcription activator-like effector nuclease (TALEN) and examined the function of zygotic nanos3 in medaka. Zygotic nanos3 homozygous (–/–) mutants derived from nanos3 heterozygous mothers formed germ cells. However, after hatching, the number of germ cells decreased considerably, resulting in infertility of both nanos3^–/– females and males. Surprisingly, both nanos3^–/– XX and XY mutants underwent precocious spermatogenesis during early gonadal development, as seen in loss-of-function mutants of foxl3, the germline sex-determination gene, in medaka. Therefore, in addition to the maintenance of germ cells, these results suggest that zygotic nanos3 affects the proper regulation of germline sex in XX medaka.