Highlights•A complex of STTs acts in sorting chloroplast Tat substrates to the thylakoids•Tat substrate activates the STT complex to undergo phase separation•Hcf106 reverses phase separation and facilitates cargo translocationSummaryIn eukaryotic cells, organelle biogenesis is pivotal for cellular function and cell survival. Chloroplasts are unique organelles with a complex internal membrane network. The mechanisms of the migration of imported nuclear-encoded chloroplast proteins across the crowded stroma to thylakoid membranes are less understood. Here, we identified two Arabidopsis ankyrin-repeat proteins, STT1 and STT2, that specifically mediate sorting of chloroplast twin arginine translocation (cpTat) pathway proteins to thylakoid membranes. STT1 and STT2 form a unique hetero-dimer through interaction of their C-terminal ankyrin domains. Binding of cpTat substrate by N-terminal intrinsically disordered regions of STT complex induces liquid-liquid phase separation. The multivalent nature of STT oligomer is critical for phase separation. STT-Hcf106 interactions reverse phase separation and facilitate cargo targeting and translocation across thylakoid membranes. Thus, the formation of phase-separated droplets emerges as a novel mechanism of intra-chloroplast cargo sorting. Our findings highlight a conserved mechanism of phase separation in regulating organelle biogenesis.Graphical abstract