The process of selecting for cellular fitness through competition plays a critical role in both development and disease. The germarium, a structure at the tip of the ovariole of a Drosophila ovary, contains two follicle stem cells (FSCs) that undergo neutral competition for the stem cell niche. Using the FSCs as a model, we performed a genetic screen through a collection of 126 mutants in essential genes on the X chromosome to identify candidates that increase or decrease competition for the FSC niche. We identified ∼55 and 6% of the mutations screened as putative FSC hypo- or hyper-competitors, respectively. We found that a large majority of mutations in vesicle trafficking genes (11 out of the 13 in the collection of mutants) are candidate hypo-competition alleles, and we confirmed the hypo-competition phenotype for four of these alleles. We also show that Sec16 and another COPII vesicle trafficking component, Sar1, are required for follicle cell differentiation. Lastly, we demonstrate that, although some components of vesicle trafficking are also required for neutral competition in the cyst stem cells of the testis, there are important tissue-specific differences. Our results demonstrate a critical role for vesicle trafficking in stem cell niche competition and differentiation, and we identify a number of putative candidates for further exploration.