piRNA gene density and SUMOylation organize piRNA transcriptional condensate formation.

Piwi-interacting RNAs (piRNAs) are essential for maintaining genome integrity and fertility in various organisms. In flies and nematodes, piRNA genes are encoded in heterochromatinized genomic clusters. The molecular mechanisms of piRNA transcription remain intriguing. Through small RNA sequencing and chromatin editing, we discovered that spatial aggregation of piRNA genes enhances their transcription in nematodes. The facultative heterochromatinized piRNA genome recruits the piRNA upstream sequence transcription complex (USTC; including PRDE-1, SNPC4, TOFU-4 and TOFU-5) and the H3K27me3 reader UAD-2, which phase-separate into droplets to initiate piRNA transcription. We searched for factors that regulate piRNA transcription and isolated the SUMO E3 ligase GEI-17 as inhibiting and the SUMO protease TOFU-3 as promoting piRNA transcription foci formation, thereby regulating piRNA production. Our study revealed that spatial aggregation of piRNA genes, phase separation and deSUMOylation may benefit the organization of functional biomolecular condensates to direct piRNA transcription in the facultative heterochromatinized genome.