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Abstract Compartments within living cells create specialized microenvironments, allowing for multiple reactions to be carried out simultaneously and efficiently. While some organelles are bound by a lipid bilayer, others are formed by liquid-liquid phase separation, such as P-granules and nucleoli. Synthetic minimal cells have been widely used to study many natural processes, including organelle formation. Here we describe a synthetic cell expressing RGG-GFP-RGG, a phase-separating protein derived from LAF-1 RGG domains, to form artificial membraneless organelles that can sequester RNA and reduce protein expression. We create complex microenvironments within synthetic cell cytoplasm and introduce a tool to modulate protein expression in synthetic cells. Engineering of compartments within synthetic cells furthers understanding of evolution and function of natural organelles, as well as it facilitates the creation of more complex and multifaceted synthetic life-like systems.