A cold, aqueous solution containing (NH 4) 2SO 4 at 53% of saturation and 5.9% w/v polyethylene glycol-400 (PEG) produces PEG-rich coacervate droplets (16%(NH 4) 2SO 4 and 37% PEG) when warmed to 25°C. In partition experiments conducted at low protein concentration, phosphoglucomutase and several other common proteins concentrate at least 20-fold in the PEG-rich phase. A temperature-induced phase separation similar to that above, but conducted in the presence of 5 mg/ml of phosphoglucomutase, can produce coacervate droplets in which the concentration of protein is about 500 mg/ml and thus approaches that in the crystal phase. The nucleation and subsequent conversion of such droplets into micrometer-size crystals of phosphoglucomutase were studied by light microscopy. Nucleation usually occurs in the periphery of these droplets, and neither phase nucleates efficiently by itself, although both support growth. Most droplets do not nucleate and subsequently dissolve as the protein concentration in the surrounding medium is depleted by incorporation into growing srystals. A major role of PEG in the nucleation/crystallization process is to repress the formation of salt-induced, disordered aggregates whose non-lattice protein-protein interactions presumably are less mobile than those in the droplet phase. In this sense, PEG acts as a nucleation catalyst. Such a mode of action is supported by studies on the effect of PEG in the conversion of salt-induced aggregates of phosphoglucomutase into protein crystals. An analogous role in the nucleation and slow growth of much larger crystals under somewhat different conditions is inferred. Such a PEG-induced effect may be general for proteins that crystallize from concentrated salt solutions.