Cell fate transition is a fascinating process involving complex dynamics of three-dimensional (3D) chromatin organization and phase separation, which play an essential role in cell fate decision by regulating gene expression. Phase separation is increasingly being considered a driving force of chromatin folding. In this review, we have summarized the dynamic features of 3D chromatin and phase separation during physiological and pathological cell fate transitions and systematically analyzed recent evidence of phase separation facilitating the chromatin structure. In addition, we discuss current advances in understanding how phase separation contributes to physical and functional enhancer-promoter contacts. We highlight the functional roles of 3D chromatin organization and phase separation in cell fate transitions, and more explorations are required to study the regulatory relationship between 3D chromatin organization and phase separation. Graphical Abstract 3D chromatin organization (shown by Hi-C contact map) and phase separation are highly dynamic and play functional roles during early embryonic development, cell differentiation, somatic reprogramming, cell transdifferentiation and pathogenetic process. Phase separation can regulate 3D chromatin organization directly, but whether 3D chromatin organization regulates phase separation remains unclear.