Condensates induced by transcription inhibition localize active chromatin to nucleoli

The proper function of the genome relies on spatial organization of DNA, RNA, and proteins, but how transcription contributes to the organization is unclear. Here, we show that condensates induced by transcription inhibition (CITIs) drastically alter genome spatial organization. CITIs are formed by SFPQ, NONO, FUS, and TAF15 in nucleoli upon inhibition of RNA polymerase II (RNAPII). Mechanistically, RNAPII inhibition perturbs ribosomal RNA (rRNA) processing, releases rRNA-processing factors from nucleoli, and enables SFPQ to bind rRNA. While accumulating in CITIs, SFPQ/TAF15 remain associated with active genes and tether active chromatin to nucleoli. In the presence of DNA double-strand breaks (DSBs), the altered chromatin compartmentalization induced by RNAPII inhibition increases gene fusions in CITIs and stimulates the formation of fusion oncogenes. Thus, proper RNAPII transcription and rRNA processing prevent the altered compartmentalization of active chromatin in CITIs, suppressing the generation of gene fusions from DSBs.