Speckle-type POZ protein (SPOP) is the substrate-binding subunit of a cullin 3 (CUL3)-based E3 ubiquitin ligase complex and is commonly mutated in prostate cancer, as well as in other solid tumours. SPOP mutations block substrate recruitment and lead to the accumulation of various proto-oncogenic proteins, but how SPOP recruits substrates is not known. Bouchard, Otero et al. find that substrate binding is necessary for SPOP complexes to accumulate in membrane-less organelles formed by phase separation. Cancer-associated SPOP mutations disrupt SPOP–substrate co-localization and phase separation, thus reducing ubiquitylation and degradation of substrates. This better understanding of the molecular mechanisms involved in substrate accumulation in SPOP-mutant cells might inform the development of therapies for cancers driven by SPOP mutations.