NORAD-induced Pumilio phase separation is required for genome stability.

Liquid-liquid phase separation is a major mechanism of subcellular compartmentalization. Although the segregation of RNA into phase-separated condensates broadly affects RNA metabolism, whether and how specific RNAs use phase separation to regulate interacting factors such as RNA-binding proteins (RBPs), and the phenotypic consequences of such regulatory interactions, are poorly understood. Here we show that RNA-driven phase separation is a key mechanism through which a long noncoding RNA (lncRNA) controls the activity of RBPs and maintains genomic stability in mammalian cells. The lncRNA NORAD prevents aberrant mitosis by inhibiting Pumilio (PUM) proteins. We show that NORAD can out-compete thousands of other PUM-binding transcripts to inhibit PUM by nucleating the formation of phase-separated PUM condensates, termed NP bodies. Dual mechanisms of PUM recruitment, involving multivalent PUM-NORAD and PUM-PUM interactions, enable NORAD to competitively sequester a super-stoichiometric amount of PUM in NP bodies. Disruption of NORAD-driven PUM phase separation leads to PUM hyperactivity and genome instability that is rescued by synthetic RNAs that induce the formation of PUM condensates. These results reveal a mechanism by which RNA-driven phase separation can regulate RBP activity and identify an essential role for this process in genome maintenance. The repetitive sequence architecture of NORAD and other lncRNAs suggests that phase separation may be a widely used mechanism of lncRNA-mediated regulation.