Phase separation concentrates mitochondrial RNA granules. Here Rey et al., show that mitochondrial RNA granules (MRGs) behaviour is consistent with liquid-liquid phase separation (LLPS) and their fusion coincides with mitochondrial remodelling. Mitochondria contain the genetic information and expression machinery to produce essential respiratory chain proteins. Within the mitochondrial matrix, newly synthesized RNA, RNA processing proteins and mitoribosome assembly factors form punctate sub-compartments referred to as mitochondrial RNA granules (MRGs)(1-3). Despite their proposed importance in regulating gene expression, the structural and dynamic properties of MRGs remain largely unknown. We investigated the internal architecture of MRGs using fluorescence super-resolution localization microscopy and correlative electron microscopy, and found that the MRG ultrastructure consists of compacted RNA embedded within a protein cloud. Using live-cell super-resolution structured illumination microscopy and fluorescence recovery after photobleaching, we reveal that MRGs rapidly exchange components and can undergo fusion, characteristic properties of fluid condensates(4). Furthermore, MRGs associate with the inner mitochondrial membrane and their fusion coincides with mitochondrial remodelling. Inhibition of mitochondrial fission or fusion leads to an aberrant accumulation of MRGs into concentrated pockets, where they remain as distinct individual units despite their close apposition. Together, our findings reveal that MRGs are nanoscale fluid compartments, which are dispersed along mitochondria via membrane dynamics.