Protein and RNA-containing molecular condensates form via liquid-liquid phase separation (LLPS), a reversible process under physiological conditions. Abnormal condensate formation and stability are linked to disease. To investigate mechanisms underlying condensate formation and morphological control, we use germ granules in primordial germ cells (PGCs) of zebrafish embryos as an in vivo model. Previously, we showed that zebrafish germ granules maintain crucial proteins and RNAs for PGC fate and display high internal spatial organization. Here, we analyzed germ granule morphology and dynamics in live embryos. Unexpectedly, granules decrease in size and size variability during early development, rather than fusing and growing as anticipated. We show that new granules form post-mitosis, coinciding with nuclear reassembly. Importantly, the conserved Tudor domain protein Tdrd7a is required for proper granule number, size, and localization; its loss leads to abnormal granule morphology and sterility, as seen in other species. These findings demonstrate that germ granule formation is tightly controlled in time and space, and that Tdrd7a is essential for this process, likely by seeding LLPS at the nuclear envelope.