Pcf11/Spt5 condensates stall RNA polymerase II to facilitate termination and piRNA-guided heterochromatin formation.

The PIWI-interacting RNA (piRNA) pathway plays a crucial role in protecting animal germ cells by repressing transposons. However, the mechanism of piRNA-guided heterochromatin formation and its relationship to transcriptional termination remains elusive. Through RNA interference screening, we discovered Pcf11 and PNUTS as essential for piRNA-guided silencing in Drosophila germ line. Enforced tethering of Pcf11 leads to co-transcriptional repression and RNA polymerase II (RNA Pol II) stalling, and both are dependent on an α-helical region of Pcf11 capable of forming condensates. An intrinsically disordered region can substitute for the α-helical region of Pcf11 in its silencing capacity and support animal development, arguing for a causal relationship between phase separation and Pcf11's function. Pcf11 stalls RNA Pol II by preferentially forming condensates with the unphosphorylated Spt5, promoted by the PP1/PNUTS phosphatase during termination. We propose that Pcf11/Spt5 condensates control termination by decelerating polymerase elongation, a property exploited by piRNAs to silence transposons and initiate RNA-mediated heterochromatin formation.