Piwi proteins function in an RNAi-like pathway that silences transposons. Piwi-associated RNAs, also known as piRNAs, act as a guide to identify Piwi targets. The tudor domain-containing protein Tdrd1 has been linked to this pathway but its function has thus far remained unclear. We show that zebrafish Tdrd1 is required for efficient Piwi-pathway activity and proper nuage formation. Furthermore, we find that Tdrd1 binds both zebrafish Piwi proteins, Ziwi and Zili, and reveals sequence specificity in the interaction between Tdrd1 tudor domains and symmetrically dimethylated arginines (sDMAs) in Zili. Finally, we show that Tdrd1 complexes contain piRNAs and RNA molecules that are longer than piRNAs. We name these longer transcripts Tdrd1-associated transcripts (TATs). TATs likely represent cleaved Piwi pathway targets and may serve as piRNA biogenesis intermediates. Altogether, our data suggest that Tdrd1 acts as a molecular scaffold for Piwi proteins, bound through specific tudor domain–sDMA interactions, piRNAs and piRNA targets.