Abstract Insoluble cytoplasmic aggregate formation of the RNA-binding protein TDP-43 is a major hallmark of neurodegenerative diseases including Amyotrophic Lateral Sclerosis. TDP-43 localizes predominantly in the nucleus, arranging itself into dynamic condensates through liquid–liquid phase separation (LLPS). Mutations and post-translational modifications can alter the condensation properties of TDP-43, contributing to the transition of liquid-like biomolecular condensates into solid-like aggregates. However, to date it has been a challenge to study the dynamics of this process in vivo. We demonstrate through live imaging that human TDP-43 undergoes nuclear condensation in spinal motor neurons in a living animal. RNA-binding deficiencies as well as post-translational modifications can lead to aberrant condensation and altered TDP-43 compartmentalization. Single-molecule tracking revealed an altered mobility profile for RNA-binding deficient TDP-43. Overall, these results provide a critically needed in vivo characterization of TDP-43 condensation, demonstrate phase separation as an important regulatory mechanism of TDP-43 accessibility, and identify a molecular mechanism of how functional TDP-43 can be regulated.