SS18-SSX onco-fusion protein formed through aberrant chromosomal translocation t (X, 18; p11, q11), is the hallmark and plays a critical role in synovial sarcomagenesis. The recent works indicated that both the pathological SS18-SSX tumorigenic fusion and the corresponding intrinsic physiological SS18 protein can form condensates but appear to have disparate properties. The underlying regulatory mechanism and the consequent biological significance remain largely unknown. We show that the physical properties of oncogenic fusion protein SS18-SSX condensates within cells undergo alterations compared to the proto-oncogene protein SS18. By small-molecule screening and mutant assay, we identified the recognition of H2AK119ub histone modification could account for the distinctive properties of SS18-SSX1 condensates. Notably, we show that SS18-SSX1 condensates have impact on SS18 condensates and hijack that in a phase separation manner, resulting in the relocation of protein SS18 to the H2AK119ub modification targeted by SS18-SSX1. Consequently, this leads to the downregulation of tumor suppressor genes occupied by SS18 physiologically, like CAV1 and DAB2. These results reveal the underlying mechanism of genomic disorder and tumorigenesis caused by the remodeling of oncoprotein SS18-SSX1 condensates at the macroscopic level.