<i>Drosophila</i> insulator proteins exhibit in vivo liquid-liquid phase separation properties.

Mounting evidence implicates liquid-liquid phase separation (LLPS), the condensation of biomolecules into liquid-like droplets in the formation and dissolution of membraneless intracellular organelles (MLOs). Cells use MLOs or condensates for various biological processes, including emergency signaling and spatiotemporal control over steady-state biochemical reactions and heterochromatin formation. Insulator proteins are architectural elements involved in establishing independent domains of transcriptional activity within eukaryotic genomes. In <i>Drosophila</i>, insulator proteins form nuclear foci known as insulator bodies in response to osmotic stress. However, the mechanism through which insulator proteins assemble into bodies is yet to be investigated. Here, we identify signatures of LLPS by insulator bodies, including high disorder tendency in insulator proteins, scaffold-client-dependent assembly, extensive fusion behavior, sphericity, and sensitivity to 1,6-hexanediol. We also show that the cohesin subunit Rad21 is a component of insulator bodies, adding to the known insulator protein constituents and γH2Av. Our data suggest a concerted role of cohesin and insulator proteins in insulator body formation and under physiological conditions. We propose a mechanism whereby these architectural proteins modulate 3D genome organization through LLPS.