From nematodes to placental mammals, key components of the germline transposon silencing piRNAs pathway localize to phase separated perinuclear granules. In Drosophila, the PIWI protein Aub, DEAD box protein Vasa and helicase Armi localize to nuage granules and are required for ping-pong piRNA amplification and phased piRNA processing. Drosophila piRNA mutants lead to genome instability and Chk2 kinase DNA damage signaling. By systematically analyzing piRNA pathway organization, small RNA production, and long RNA expression in single piRNA mutants and corresponding chk2/mnk double mutants, we show that Chk2 activation disrupts nuage localization of Aub and Vasa, and that the HP1 homolog Rhino, which drives piRNA precursor transcription, is required for Aub, Vasa, and Armi localization to nuage. However, these studies also show that ping-pong amplification and phased piRNA biogenesis are independent of nuage localization of Vasa, Aub and Armi. Dispersed cytoplasmic proteins thus appear to mediate these essential piRNA pathway functions.