SummaryMatrin-3 (MATR3) is a DNA- and RNA-binding protein implicated in amyotrophic lateral sclerosis (ALS), frontotemporal dementia (FTD), and distal myopathy. Here, we report the development of a yeast model of MATR3 proteotoxicity and aggregation. MATR3 is toxic and forms dynamic shell-like nuclear condensates in yeast. Disease-associated mutations in MATR3 impair condensate dynamics and disrupt condensate morphology. MATR3 toxicity is largely driven by its RNA-recognitions motifs (RRMs). Further, deletion of one or both RRMs drives coalescence of these condensates. Aberrant phase separation of several different RBPs underpins ALS/FTD, and we have engineered Hsp104 variants to reverse this misfolding. Here, we demonstrate that these same variants also counter MATR3 toxicity. We suggest that these Hsp104 variants which rescue MATR3, TDP-43, and FUS toxicity might be employed against a range of ALS/FTD-associated proteins. We anticipate that our yeast model could be a useful platform to screen for modulators of MATR3 misfolding.