The synthesis of pre-mRNA by RNA polymerase II (Pol II) involves the formation of a transcription initiation complex and a transition to an elongation complex 1– 4 . The large subunit of Pol II contains an intrinsically disordered C-terminal domain (CTD), which is phosphorylated by cyclin-dependent kinases (CDKs) during the initiation-to-elongation transition, thus influencing the CTD’s interaction with different components of the initiation or the RNA splicing apparatus ( Fig. 1a) 5, 6 . Recent observations suggest that this model provides only a partial picture of the effects of CTD phosphorylation. Both the transcription initiation machinery and the splicing machinery can form phase-separated condensates containing large numbers of component molecules; hundreds of Pol II and Mediator molecules are concentrated in condensates at super-enhancers 7, 8 and large numbers of splicing factors are concentrated in nuclear speckles, some of which occur at highly active transcription sites 9– 12 . Here we investigate whether phosphorylation of the CTD regulates its incorporation into phase-separated condensates associated with transcription initiation and splicing. We find that the hypophosphorylated Pol II CTD is incorporated into Mediator condensates and that phosphorylation by regulatory CDKs reduces this incorporation. We also find that the hyperphosphorylated CTD is preferentially incorporated into condensates formed by splicing factors. These results suggest that Pol II CTD phosphorylation drives an exchange from condensates involved in transcription initiation to those involved in RNA processing and implicates phosphorylation as a mechanism to regulate condensate preference.