Fanconi anemia (FA) is a recessive X-linked and autosomal genetic disease associated with bone marrow failure and increased cancer, as well as severe germline defects such as hypogonadism and germ cell depletion. Although deficiencies in FA factors are commonly associated with germ cell defects, it remains unknown whether the FA pathway is involved in unique epigenetic events in germ cells. In this study, we generated Fancb mutant mice, the first mouse model of X-linked FA, and identified a novel function of the FA pathway in epigenetic regulation during mammalian gametogenesis. Fancb mutant mice were infertile and exhibited primordial germ cell (PGC) defects during embryogenesis. Further, Fancb mutation resulted in the reduction of undifferentiated spermatogonia in spermatogenesis, suggesting that FANCB regulates the maintenance of undifferentiated spermatogonia. Additionally, based on functional studies, we dissected the pathway in which FANCB functions during meiosis. The localization of FANCB on sex chromosomes is dependent on MDC1, a binding partner of H2AX phosphorylated at serine 139 (γH2AX), which initiates chromosome-wide silencing. Also, FANCB is required for FANCD2 localization during meiosis, suggesting that the role of FANCB in the activation of the FA pathway is common to both meiosis and somatic DNA damage responses. H3K9me2, a silent epigenetic mark, was decreased on sex chromosomes, whereas H3K9me3 was increased on sex chromosomes in Fancb mutant spermatocytes. Taken together, these results indicate that FANCB functions at critical stages of germ cell development and reveal a novel function of the FA pathway in the regulation of H3K9 methylation in the germline.