The eukaryotic nucleus is not a homogenous single‐spaced but a highly compartmentalized organelle, partitioned by various types of membraneless structures, including nucleoli, PML bodies, paraspeckles, DNA damage foci and RNA clouds. Over the past few decades, these nuclear structures have been implicated in biological reactions such as gene regulation and DNA damage response and repair, and are thought to provide “microenvironments,” facilitating these reactions in the nucleus. Notably, an altered morphology of these nuclear structures is found in many cancers, which may relate to so‐called “nuclear atypia” in histological examinations. While the diagnostic significance of nuclear atypia has been established, its nature has remained largely enigmatic and awaits characterization. Here, we review the emerging biophysical principles that govern biomolecular condensate assembly in the nucleus, namely, liquid‐liquid phase separation (LLPS), to investigate the nature of the nuclear microenvironment. In the nucleus, LLPS is typically driven by multivalent interactions between proteins with intrinsically disordered regions, and is also facilitated by protein interaction with nucleic acids, including nuclear non–coding RNAs. Importantly, an altered LLPS leads to dysregulation of nuclear events and epigenetics, and often to tumorigenesis and tumor progression. We further note the possibility that LLPS could represent a new therapeutic target for cancer intervention.