While cytoplasmic aggregation of TDP-43 is a pathological hallmark of amyotrophic lateral sclerosis and frontotemporal dementia, how aggregates form and what drives its nuclear clearance have not been determined. Here we show that TDP-43 at its endogenous level undergoes liquid-liquid phase separation (LLPS) within nuclei in multiple cell types. Increased concentration of TDP-43 in the cytoplasm or transient exposure to sonicated amyloid-like fibrils is shown to provoke long-lived liquid droplets of cytosolic TDP-43 whose assembly and maintenance are independent of conventional stress granules. Cytosolic liquid droplets of TDP-43 accumulate phosphorylated TDP-43 and rapidly convert into gels/solids in response to transient, arsenite-mediated stress. Cytoplasmic TDP-43 droplets slowly recruit importin-α and Nup62 and induce mislocalization of RanGap1, Ran, and Nup107, thereby provoking inhibition of nucleocytoplasmic transport, clearance of nuclear TDP-43, and cell death. These findings identify a neuronal cell death mechanism that can be initiated by transient-stress-induced cytosolic de-mixing of TDP-43. Display omitted •Transient stress induces long-lasting phase separation of cytoplasmic TDP-43•Formation/maintenance of phase separated TDP-43 is independent of stress granules•Phase-separated TDP-43 inhibits nuclear transport by de-mixing importin-α and Nup62•Cytoplasmic TDP-43 de-mixing depletes nuclear TDP-43 and induces cell death TDP-43 aggregation is the major hallmark of multiple neurodegenerative diseases, including ALS and FTD. Gasset-Rosa et al. demonstrate that transient stress induces long-lasting cytoplasmic TDP-43 de-mixing independent of stress granules, driving nuclear import defects, nuclear TDP-43 clearance, and cell death.