Nuclear condensates have been shown to regulate cell fate control, but its role in oncogenic transformation remains largely unknown. Here we show acquisition of oncogenic potential by nuclear condensate remodeling. The proto-oncogene SS18 and its oncogenic fusion SS18-SSX1 can both form condensates, but with drastically different properties and impact on 3D genome architecture. The oncogenic condensates, not wild type ones, readily exclude HDAC1 and 2 complexes, thus, allowing aberrant accumulation of H3K27ac on chromatin loci, leading to oncogenic expression of key target genes. These results provide the first case for condensate remodeling as a transforming event to generate oncogene and such condensates can be targeted for therapy. One sentence summary: Expulsion of HDACs complexes leads to oncogenic transformation.