TDP-43 is an RNA-binding protein ubiquitously dysregulated in neurodegeneration. We found that under stress conditions, TDP-43 undergoes reversible condensation in the nucleus of cultured cells including human neurons. These condensates (“TCs”) are non-liquid assemblies with low dynamic properties. Their proteomic analysis and subsequent comparison with the normal (soluble) TDP-43 interactome revealed that upon condensate partitioning, TDP-43 dissociates from its normal protein binding partners. We propose that the main function of TCs is rapid but reversible inactivation of TDP-43 during stress. This can help fine-tune the splicing patterns under stress to enable efficient stress response and survival.