Many eukaryotic viruses require membrane-bound compartments for replication, but no such organelles are known to be formed by prokaryotic viruses. Bacteriophages of the family sequester their genomes within a phage-generated organelle, the phage nucleus, which is enclosed by a lattice of the viral protein ChmA. Previously, we observed lipid membrane-bound vesicles in cells infected by , but due to the paucity of genetics tools for these viruses it was unknown if these vesicles represented unproductive, abortive infections or a stage in the phage life cycle. Using the recently-developed dRfxCas13d-based knockdown system CRISPRi-ART in combination with fluorescence microscopy and cryo-electron tomography, we show that inhibiting phage nucleus formation arrests infections at an early stage in which the injected phage genome is enclosed within a membrane-bound early phage infection (EPI) vesicle. We demonstrate that early phage genes are transcribed by the virion-associated RNA polymerase from the genome within the compartment, making the EPI vesicle the first known example of a lipid membrane-bound organelle that separates transcription from translation in prokaryotes. Further, we show that the phage nucleus is essential for the phage life cycle, with genome replication only beginning after the injected DNA is transferred from the EPI vesicle to the newly assembled phage nucleus. Our results show that require two sophisticated subcellular compartments of distinct compositions and functions that facilitate successive stages of the viral life cycle.