PIWI proteins and their associated small RNAs, called PIWI-interacting RNAs (piRNAs), restrict transposon activity in animal gonads to ensure fertility. Distinct biogenesis pathways load piRNAs into the PIWI proteins MILI and MIWI2 in the mouse male embryonic germline. While most MILI piRNAs are derived via a slicer-independent pathway, MILI slicing loads MIWI2 with a series of phased piRNAs. Tudor domain-containing 12 (TDRD12) and its interaction partner Exonuclease domain-containing 1 (EXD1) are required for loading MIWI2, but only Tdrd12 is essential for fertility, leaving us with no explanation for the physiological role of Exd1. Using an artificial piRNA precursor, we demonstrate that MILI-triggered piRNA biogenesis is greatly reduced in the Exd1 mutant. The situation deteriorates in the sensitized Exd1 mutant (Exd1−/−;Tdrd12+/−), where diminished MIWI2 piRNA levels de-repress LINE1 retrotransposons, leading to infertility. Thus, EXD1 enhances MIWI2 piRNA biogenesis via a functional interaction with TDRD12. Pandey et al. demonstrate that EXD1 functionally partners with TDRD12 in the biogenesis of nuclear piRNAs, which is essential for transposon suppression and fertility in mice.