The nucleocapsid (N) protein of coronaviruses serves two major functions: compaction of the RNA genome in the virion and regulation of viral gene transcription. It is not clear how the N protein mediates such distinct functions. The N protein contains two RNA-binding domains surrounded by regions of intrinsic disorder. Phosphorylation of the central disordered region promotes the protein’s transcriptional function, but the underlying mechanism is not known. Here, we show that the N protein of SARS-CoV-2, together with viral RNA, forms biomolecular condensates. Unmodified N protein forms partially ordered gel-like condensates and discrete 15-nm particles based on multivalent RNA-protein and protein-protein interactions. Phosphorylation reduces these interactions, generating a more liquid-like droplet. We propose that distinct oligomeric states support the two functions of the N protein: unmodified protein forms a structured oligomer that is suited for nucleocapsid assembly, and phosphorylated protein forms a liquid-like compartment for viral genome processing. Display omitted •Nucleocapsid protein of SARS-CoV-2 forms biomolecular condensates with viral RNA•Unmodified N protein forms gel-like condensates containing discrete RNP particles•Phosphorylated N protein forms dynamic, liquid-like condensates•The two condensate forms are well suited for the two major functions of N protein Carlson et al. demonstrate that the nucleocapsid (N) protein of SARS-CoV-2, together with viral RNA, forms gel-like biomolecular condensates and particles that are consistent with its genome-packaging role. Phosphorylation transforms condensates into liquid-like droplets, which may provide a cytoplasmic compartment to support the protein’s function in viral genome transcription.