Cytoplasmic FUS aggregates are a pathological hallmark in a subset of patients with frontotemporal dementia (FTD) or amyotrophic lateral sclerosis (ALS). A key step that is disrupted in these patients is nuclear import of FUS mediated by the import receptor Transportin/Karyopherin-β2. In ALS-FUS patients, this is caused by mutations in the nuclear localization signal (NLS) of FUS that weaken Transportin binding. In FTD-FUS patients, Transportin is aggregated, and post-translational arginine methylation, which regulates the FUS-Transportin interaction, is lost. Here, we show that Transportin and arginine methylation have a crucial function beyond nuclear import-namely to suppress RGG/RG-driven phase separation and stress granule association of FUS. ALS-associated FUS-NLS mutations weaken the chaperone activity of Transportin and loss of FUS arginine methylation, as seen in FTD-FUS, promote phase separation, and stress granule partitioning of FUS. Our findings reveal two regulatory mechanisms of liquid-phase homeostasis that are disrupted in FUS-associated neurodegeneration.