Germ cells are specialized cells located in the gonads (ovaries in females and testes in males). These cells have the potential to develop into the sperm or egg of a developing organism. 

These cells play a critical role in sexual reproduction. They are responsible for transmitting all the heritable characteristics of an organism to the next generation.

In humans, germ cells are formed early during fetal development. In females, they become part of primordial follicles in the ovaries. In males, they are spermatogonia, which later develop into sperm.