Germline-soma segregation is crucial for fertility. Primordial germ cells (PGCs) arise early in development and are the very first cells to form in the Drosophila embryo. At the time of PGC formation, the embryo is a syncytium where nuclei divide within a common cytoplasm. Whereas invaginating plasma membrane furrows enclose nuclei to form somatic lineages during the 14th nuclear division cycle, PGCs emerge from the syncytium during the 9th division cycle in a mechanistically distinct process. PGC formation depends on maternally deposited germ granules localized at the embryo's posterior pole. Germ granules trigger protrusion of membrane buds that enlarge to surround several nuclei that reach the posterior pole. Buds are remodeled to cells through mitotic division and constriction of the bud neck. Previous studies implicated F-actin, actin regulators, and contractile ring components in mitotic furrow formation, but what drives bud emergence and how germ granules provoke reshaping of the plasma membrane remain unknown. Here, we investigate the mechanism of germ-granule-induced bud formation. Treating the embryo as a pressurized elastic shell, we used mathematical modeling to examine possible mechanical mechanisms for local membrane protrusion. One mechanism, outward buckling produced by polymerization of a branched F-actin network, is supported by experimental data. Further, we show that germ granules modify membrane lipid composition, promoting local branched F-actin polymerization that initiates PGC formation. We propose that a mechanism for membrane lipid regulation of F-actin dynamics in migrating cells has been adapted for PGC formation in response to spatial cues provided by germ granules.