The ongoing coronavirus disease 2019 (COVID-19) pandemic has raised an urgent need to develop effective therapeutics against the severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). As a potential antiviral drug target, the nucleocapsid (N) protein of SARS-CoV-2 functions as a viral RNA chaperone and plays vital and multifunctional roles during the life cycle of coronavirus1-3. In this study, we discovered that the N protein of SARS-CoV-2 undergoes liquid-liquid phase separation (LLPS) both in vitro and in vivo, which is further modulated by viral RNA. In addition, we found that, the core component of the RNA-dependent RNA polymerase (RdRp) of SARS-CoV-2, nsp12, preferentially partitions into the N protein condensates. Moreover, we revealed that, two small molecules, i.e., CVL218 and PJ34, can be used to intervene the N protein driven phase separation and loosen the compact structures of the condensates of the N-RNA-nsp12 complex of SARS-CoV-2. The discovery of the LLPS-mediated interplay between N protein and nsp12 and the corresponding modulating compounds illuminates a feasible way to improve the accessibility of antiviral drugs (e.g., remdesivir) to their targets (e.g., nsp12/RdRp), and thus may provide useful hints for further development of effective therapeutic strategies against SARS-CoV-2.