Eukaryotic gene regulation and pre-mRNA transcription depend on the carboxy-terminal domain (CTD) of RNA polymerase (Pol) II. Due to its highly repetitive, intrinsically disordered sequence, the CTD enables clustering and phase separation of Pol II. The molecular interactions that drive CTD phase separation and Pol II clustering are unclear. Here, we show that multivalent interactions involving tyrosine impart temperature- and concentration-dependent self-coacervation of the CTD. NMR spectroscopy, molecular ensemble calculations and all-atom molecular dynamics simulations demonstrate the presence of diverse tyrosine-engaging interactions, including tyrosine-proline contacts, in condensed states of human CTD and other low-complexity proteins. We further show that the network of multivalent interactions involving tyrosine is responsible for the co-recruitment of the human Mediator complex and CTD during phase separation. Our work advances the understanding of the driving forces of CTD phase separation and thus provides the basis to better understand CTD-mediated Pol II clustering in eukaryotic gene transcription.