Reconciling competing models on the roles of condensates and soluble complexes in transcription factor function.

Phase separation explains the exquisite spatial and temporal regulation of many biological processes, but the role of transcription factor-mediated condensates in gene regulation is contentious, requiring head-to-head comparison of competing models. Here, we focused on the prototypical yeast transcription factor Gcn4 and assessed two models for gene transcription activation, i.e., mediated via soluble complexes or transcriptional condensates. Both models rely on the ability of transcription factors and coactivators to engage in multivalent interactions. Unexpectedly, we found that propensity to form homotypic Gcn4 condensates does not correlate well with transcriptional activity. Contrary to prevailing models, binding to DNA suppresses Gcn4 phase separation. Notably, the ability of Gcn4 to form soluble complexes with coactivator subunit Med15 closely mirrored the propensity to recruit Med15 into condensates, indicating that these properties are intertwined and cautioning against interpretation of mutational data without head-to-head comparisons. However, Gcn4 variants with the highest affinity for Med15 do not function as well as expected and instead have activities that reflect their abilities to phase separate with Med15. These variants therefore indeed form cellular condensates, and those attenuate activity. Our results show that transcription factors can function as soluble complexes as well as condensates, reconciling two seemingly opposing models, and have implications for other phase-separating systems.