Neuronal inclusions of aggregated RNA‐binding protein fused in sarcoma (FUS) are hallmarks of ALS and frontotemporal dementia subtypes. Intriguingly, FUS's nearly uncharged, aggregation‐prone, yeast prion‐like, low sequence‐complexity domain (LC) is known to be targeted for phosphorylation. Here we map in vitro and in‐cell phosphorylation sites across FUS LC. We show that both phosphorylation and phosphomimetic variants reduce its aggregation‐prone/prion‐like character, disrupting FUS phase separation in the presence of RNA or salt and reducing FUS propensity to aggregate. Nuclear magnetic resonance spectroscopy demonstrates the intrinsically disordered structure of FUS LC is preserved after phosphorylation; however, transient domain collapse and self‐interaction are reduced by phosphomimetics. Moreover, we show that phosphomimetic FUS reduces aggregation in human and yeast cell models, and can ameliorate FUS‐associated cytotoxicity. Hence, post‐translational modification may be a mechanism by which cells control physiological assembly and prevent pathological protein aggregation, suggesting a potential treatment pathway amenable to pharmacologic modulation. Synopsis Self‐association of the ALS and FTD neurodegenerative disease‐linked RNA‐binding protein FUS is regulated by phosphorylation of its low complexity domain. FUS low complexity (LC) domain can be phosphorylated at several sites: by DNA‐PK at 12 sites in vitro, and in human cells after DNA damage at additional sites. FUS LC phosphorylation and phosphomimetic substitution discourages phase separation and aggregation. FUS LC phosphomimetic substitution decreases FUS aggregation in yeast and human cell models. FUS LC phosphomimetic substitution reduces FUS toxicity in the yeast model. Post‐translational modification emerges as a cellular mechanism for controlling physiological assembly of the ALS and FTD neurodegenerative disease‐linked RNA‐binding protein FUS.