PIWI proteins and piRNA pathways are essential for transposon silencing and some aspects of gene regulation during animal germline development. In contrast to most animal species, some flatworms also express PIWIs and piRNAs in somatic stem cells, where they are required for tissue renewal and regeneration. Here, we have identified and characterized piRNAs and PIWI proteins in the emerging model flatworm Macrostomum lignano. We found that M. lignano encodes at least three PIWI proteins. One of these, Macpiwi1, acts as a key component of the canonical piRNA pathway in the germline and in somatic stem cells. Knockdown of Macpiwi1 dramatically reduces piRNA levels, derepresses transposons, and severely impacts stem cell maintenance. Knockdown of the piRNA biogenesis factor Macvasa caused an even greater reduction in piRNA levels with a corresponding increase in transposons. Yet, in Macvasa knockdown animals, we detected no major impact on stem cell self-renewal. These results may suggest stem cell maintenance functions of PIWI proteins in flatworms that are distinguishable from their impact on transposons and that might function independently of what are considered canonical piRNA populations.© 2015 Zhou et al.; Published by Cold Spring Harbor Laboratory Press for the RNA Society.