In C. elegans, efficient RNA silencing requires small RNA amplification mediated by RNA-dependent RNA polymerases (RdRPs). RRF-1, an RdRP, and other Mutator complex proteins localize to Mutator foci, which are perinuclear germline foci that associate with nuclear pores and P granules to facilitate small RNA amplification. The Mutator complex protein MUT-16 is critical for Mutator foci assembly. By analyzing small deletions of MUT-16, we identify specific regions of the protein that recruit other Mutator complex components and demonstrate that it acts as a scaffolding protein. We further determine that the C-terminal region of MUT-16, a portion of which contains predicted intrinsic disorder, is necessary and sufficient to promote Mutator foci formation. Finally, we establish that MUT-16 foci have many properties consistent with a phase-separated condensate and propose that Mutator foci form through liquid-liquid phase separation of MUT-16. P granules, which contain additional RNA silencing proteins, have previously been shown to have liquid-like properties. Thus, RNA silencing in C. elegans germ cells may rely on multiple phase-separated compartments through which sorting, processing, and silencing of mRNAs occurs.