Apomixis is a form of asexual reproduction through seeds in angiosperms. Apomictic plants bypass meiosis and fertilization, developing offspring that are genetically identical to their mother. In a genetic screen for maize (Zea mays) mutants mimicking aspects of apomixis, we identified a dominant mutation resulting in the formation of functional unreduced gametes. The mutant shows defects in chromatin condensation during meiosis and subsequent failure to segregate chromosomes. The mutated locus codes for AGO104, a member of the ARGONAUTE family of proteins. AGO104 accumulates specifically in somatic cells surrounding the female meiocyte, suggesting a mobile signal rather than cell-autonomous control. AGO104 is necessary for non-CG methylation of centromeric and knob-repeat DNA. Digital gene expression tag profiling experiments using high-throughput sequencing show that AGO104 influences the transcription of many targets in the ovaries, with a strong effect on centromeric repeats. AGO104 is related to Arabidopsis thaliana AGO9, but while AGO9 acts to repress germ cell fate in somatic tissues, AGO104 acts to repress somatic fate in germ cells. Our findings show that female germ cell development in maize is dependent upon conserved small RNA pathways acting non-cell-autonomously in the ovule. Interfering with this repression leads to apomixis-like phenotypes in maize.