Establishment of the primordial follicle (PF) pool is pivotal for the female reproductive lifespan; however, the mechanism of primordial folliculogenesis is poorly understood. Here, the transcription factor SP1 was shown to be essential for PF formation in mice. Our results showed that SP1 is present in both oocytes and somatic cells during PF formation in the ovary. Knockdown of Sp1 expression, especially in pregranulosa cells, significantly suppressed nest breakdown, oocyte apoptosis, and PF formation, suggesting that SP1 expressed by somatic cells functions in the process of primordial folliculogenesis. We further demonstrated that SP1 governs the recruitment and maintenance of Forkhead box L2-positive (FOXL2+) pregranulosa cells using an Lgr5-EGFP-IRES-CreERT2 (Lgr5-KI) reporter mouse model and a FOXL2+ cell-specific knockdown model. At the molecular level, SP1 functioned mainly through manipulation of NOTCH2 expression by binding directly to the promoter of the Notch2 gene. Finally, consistent with the critical role of granulosa cells in follicle survival in vitro, massive loss of oocytes in Sp1 knockdown ovaries was evidenced before puberty after the ovaries were transplanted under the renal capsules. Conclusively, our results reveal that SP1 controls the establishment of the ovarian reserve by regulating pregranulosa cell development in the mammalian ovary.