Trans-activation response DNA-binding protein of 43 kDa (TDP-43) regulates RNA processing and forms neuropathological aggregates in patients with amyotrophic lateral sclerosis and frontotemporal lobar degeneration. Investigating TDP-43 post-translational modifications, we discovered that K84 acetylation reduced nuclear import whereas K136 acetylation impaired RNA binding and splicing capabilities of TDP-43. Such failure of RNA interaction triggered TDP-43 phase separation mediated by the C-terminal low complexity domain, leading to the formation of insoluble aggregates with pathologically phosphorylated and ubiquitinated TDP-43. Introduction of acetyl-lysine at the identified sites via amber suppression confirmed the results from site-directed mutagenesis. K84-acetylated TDP-43 showed cytoplasmic mislocalization, and the aggregation propensity of K136-acetylated TDP-43 was confirmed. We generated antibodies selective for TDP-43 acetylated at these lysines, and found that sirtuin-1 can potently deacetylate K136-acetylated TDP-43 and reduce its aggregation propensity. Thus, distinct lysine acetylations modulate nuclear import, RNA binding and phase separation of TDP-43, suggesting regulatory mechanisms for TDP-43 pathogenesis.