Gene expression regulation of protein-coding genes relies on core transcription machinery that comprises basal transcription factors and co-transcriptional processing factors. However, in germline tissues, gametogenesis is facilitated by an alternative system involving paralog-based core machineries. Despite this, the molecular mechanisms and functional implications of such paralog-based genome regulation are not fully understood. In the context of a limited understanding of germline gene regulation, our study describes and investigates the paralog-based Polymerase Associated Factor 1 Complex (PAF1C) in Drosophila melanogaster. Our findings reveal that the testis-specific PAF1C (tPAF) forms an in vivo protein complex in the nucleolus of spermatocytes and is indispensable for male fertility. tPAF associates with various transcription and co-transcriptional factors, including other testis-specific paralog-based complexes, supporting germline development through an undisclosed mechanism. Phenotypically, tPAF mutants display a fully penetrant defect in post-meiotic stages, leading to an inability to produce mature sperm. Additionally, tPAF mutants exhibit anomalies in chromosome condensation preceding meiosis, resulting in defective metaphase I. Unlike canonical meiosis, homologous chromosome pairing in Drosophila melanogaster spermatocytes does not involve the synaptonemal complex and recombination, indicating a role for tPAF in homologous pairing and condensation. In summary, our investigation uncovers an indispensable co-transcriptional regulator establishing connections among several germline-specific paralogs of the core transcription machinery resulting in proper germline gene regulation, and shedding light on the previously unexplored connection between transcriptional regulation and chromosomal condensation in germline tissues.