The nuclear RNA-binding protein TDP-43 forms abnormal cytoplasmic aggregates in the brains of amyotrophic lateral sclerosis (ALS) and frontotemporal dementia (FTD) patients and several molecular mechanisms promoting TDP-43 cytoplasmic mislocalization and aggregation have been proposed, including defects in nucleocytoplasmic transport, stress granules (SG) disassembly and post-translational modifications (PTM). SUMOylation is a PTM which regulates a variety of cellular processes and, similarly to ubiquitination, targets lysine residues. To investigate the possible regulatory effects of SUMOylation on TDP-43 activity and trafficking, we first assessed that TDP-43 is SUMO-conjugated in the nuclear compartment both covalently and non-covalently in the RRM1 domain at the predicted lysine 136 and SUMO-interacting motif (SIM, 106–110 residues), respectively. By using the SUMO-mutant TDP-43 K136R protein, we demonstrated that SUMOylation modifies TDP-43 splicing activity, specifically exon skipping, and influences its sub-cellular localization and recruitment to SG after oxidative stress. When promoting deSUMOylation by SENP1 enzyme over-expression or by treatment with the cell-permeable SENP1 peptide TS-1, the cytoplasmic localization of TDP-43 increased, depending on its SUMOylation. Moreover, deSUMOylation by TS-1 peptide favoured the formation of small cytoplasmic aggregates of the C-terminal TDP-43 fragment p35, still containing the SUMO lysine target 136, but had no effect on the already formed p25 aggregates. Our data suggest that TDP-43 can be post-translationally modified by SUMOylation which may regulate its splicing function and trafficking, indicating a novel and druggable mechanism to explore as its dysregulation may lead to TDP-43 pathological aggregation in ALS and FTD.