Monoubiquitination of histone H2B plays important roles in nucleosome assembly and transcriptional regulation in yeast and mammals. It has been proposed that the yeast E3 ligase Bre1 installs ubiquitin on H2B in a linear manner by interacting with RNA polymerase II during transcription. Gallego et al. now characterize a new model for ubiquitination of H2B independent of RNA polymerase II. The authors found that a Bre1-interacting protein, Lge1, can form droplets via liquid–liquid phase separation (LLPS) mediated by its intrinsically disordered domain. Bre1 encases the Lge1 droplets to regulate the entry of the E2 enzyme Rad6 and nucleosomes into the droplets. Formation of LLPS and the interaction between Lge1 and Bre1 are both required for H2B ubiquitination within gene bodies. Furthermore, using protein sedimentation assays and cellular imaging, the authors showed that a large complex of Lge1 and Bre1 exists in cells. This study unveils a vital role for LLPS in organizing molecular reaction chambers to regulate the post-translational modification of chromatin.