The sex-linked, recessive $otu^1$ mutant of Drosophila melanogaster was studied cytologically to reveal the effect of the otu gene mutation on oogenesis. Consequently, the germarium of the $otu^1$ mutant was found to be larger as compared to the normal fertile one and contains many undifferentiated tumor cells resembling cystocytes. Each ovary consists of three types of ovarioles; ovarioles with only a germarium, ovarioles with a germarium and one tumor chamber, and ovarioles with a germarium and two tumor chambers. In the $otu^1$ germarium, the mesodermal follicle cells invade the clusters of different number of tumor cells at the posterior region of the germarium in order to make the tumor chamber and the dividing frequency of the tumor cells in the first tumor chamber was six times more than in the second tumor chamber. Follicle cells surrounding the tumor chamber are morphologically normal, but the number of the follicle cells becomes less as the tumor chambers move down contrary to the fertile one. The $otu^1$ mutant female never lays the egg and the formation of the vitelline membrane is incomplete. The $otu^1$ mutant tumor cells also showed characteristics of certain rapidly dividing cells and its nucleus is lobulated.