The localization of transcriptional activity in specialized transcription bodies is a hallmark of gene expression in eukaryotic cells.1–3 How proteins of the transcriptional machinery come together to form such bodies, however, is unclear. Here, we take advantage of two large, isolated, and long-lived transcription bodies that reproducibly form during early zebrafish embryogenesis to characterize the dynamics of transcription body formation. Once formed, these transcription bodies are enriched for initiating and elongating RNA polymerase II, as well as the transcription factors Nanog and Sox19b. Analyzing the events leading up to transcription, we find that Nanog and Sox19b cluster prior to transcription. The clustering of transcription factors is sequential; Nanog clusters first, and this is required for the clustering of Sox19b and the initiation of transcription. Mutant analysis revealed that both the DNA-binding domain as well as one of the two intrinsically disordered regions of Nanog are required to organize the two bodies of transcriptional activity. Taken together, our data suggest that the clustering of transcription factors dictates the formation of transcription bodies. Display omitted •Transcription factors cluster prior to transcription•Transcriptional activity results in the disassembly of transcription factor clusters•Nanog can recruit Sox19b as well as RNA polymerase II into transcription bodies•This organizing activity of Nanog requires its DBD as well as one of its IDRs The localization of transcriptional activity in specialized transcription bodies is a hallmark of gene expression in eukaryotic cells. Here, Kuznetsova et al. show that the transcription factor Nanog can recruit other components of the transcriptional machinery to form such transcription bodies.