The TRIM-NHL protein Meiotic P26 (Mei-P26) acts as a regulator of cell fate in Drosophila. Its activity is critical for ovarian germline stem cell maintenance, differentiation of oocytes and spermatogenesis. Mei-P26 functions as a post-transcriptional regulator of gene expression, however, the molecular details of how its NHL domain selectively recognizes and regulates its mRNA targets have remained elusive. Here, we present the crystal structure of the Mei-P26 NHL domain at 1.6 Å resolution and identify key amino acids that confer substrate specificity and distinguish Mei-P26 from closely related TRIM-NHL proteins. Furthermore, we identify mRNA targets of Mei-P26 in cultured Drosophila cells and show that Mei-P26 can act as either a repressor or activator of gene expression on different RNA targets. Our work reveals the molecular basis of RNA recognition by Mei-P26 and the fundamental functional differences between otherwise very similar TRIM-NHL proteins.