The ongoing 2019 novel coronavirus disease (COVID-19) caused by SARS-CoV-2 has posed a worldwide pandemic and a major global public health threat. The severity and mortality of COVID-19 are associated with virus-induced dysfunctional inflammatory responses and cytokine storms. However, the interplay between host inflammatory responses and SARS-CoV-2 infection remains largely unknown. Here, we demonstrate that SARS-CoV-2 nucleocapsid (N) protein, the major structural protein of the virion, promotes the virus-triggered activation of NF-κB signaling. After binding to viral RNA, N protein robustly undergoes liquid-liquid phase separation (LLPS), which recruits TAK1 and IKK complex, the key kinases of NF-κB signaling, to enhance NF-κB activation. Moreover, 1,6-hexanediol, the inhibitor of LLPS, can attenuate the phase separation of N protein and restrict its regulatory functions in NF-κB activation. These results suggest that LLPS of N protein provides a platform to induce NF-κB hyper-activation, which could be a potential therapeutic target against COVID-19 severe pneumonia.