During Drosophila melanogaster oogenesis, the proper localization of gurken (grk) mRNA and protein is required for the establishment of the dorsal-ventral axis of the egg and future embryo. Squid (Sqd) is an RNA-binding protein that is required for the correct localization and translational regulation of the grk message. We show that Cup and polyA-binding protein (PABP) interact physically with Sqd and with each other in ovaries. We show that cup mutants lay dorsalized eggs, enhance dorsalization of weak sqd alleles, and display defects in grk mRNA localization and Grk protein accumulation. In contrast, pAbp mutants lay ventralized eggs and enhance grk haploinsufficiency. PABP also interacts genetically and biochemically with Encore. These data predict a model in which Cup and Sqd mediate translational repression of unlocalized grk mRNA, and PABP and Enc facilitate translational activation of the message once it is fully localized to the dorsal-anterior region of the oocyte. These data also provide the first evidence of a link between the complex of commonly used trans-acting factors and Enc, a factor that is required for grk translation.