Germ granules, condensates of phase-separated RNA and protein, are organelles essential for germline development in different organisms The patterning of the granules and its relevance for germ cell fate are not fully understood. Combining three-dimensional in vivo structural and functional analyses, we study the dynamic spatial organization of molecules within zebrafish germ granules. We find that localization of RNA molecules to the periphery of the granules, where ribosomes are localized depends on translational activity at this location. In addition, we find that the vertebrate-specific Dead end (Dnd1) protein is essential for nanos3 RNA localization at the condensates' periphery. Accordingly, in the absence of Dnd1, or when translation is inhibited, nanos3 RNA translocates into the granule interior, away from the ribosomes, a process that is correlated with loss of germ cell fate. These findings highlight the relevance of sub-granule compartmentalization for posttranscriptional control, and its importance for preserving germ cell totipotency.