Nuclear compartments form via biomolecular phase separation, mediated through multivalent properties of biomolecules concentrated within condensates. Certain compartments are associated with specific chromatin regions, including transcriptional initiation condensates, which are composed of transcription factors and transcriptional machinery, and form at acetylated regions including enhancer and promoter loci. While protein self-interactions, especially within low-complexity and intrinsically disordered regions, are known to mediate condensation, the role of substrate-binding interactions in regulating the formation and function of biomolecular condensates is under-explored. Here, utilizing live-cell experiments in parallel with coarse-grained simulations, we investigate how chromatin interaction of the transcriptional activator BRD4 modulates its condensate formation. We find that both kinetic and thermodynamic properties of BRD4 condensation are affected by chromatin binding: nucleation rate is sensitive to BRD4-chromatin interactions, providing an explanation for the selective formation of BRD4 condensates at acetylated chromatin regions, and thermodynamically, multivalent acetylated chromatin sites provide a platform for BRD4 clustering below the concentration required for off-chromatin condensation. This provides a molecular and physical explanation of the relationship between nuclear condensates and epigenetically modified chromatin that results in their mutual spatiotemporal regulation, suggesting that epigenetic modulation is an important mechanism by which the cell targets transcriptional condensates to specific chromatin loci. [Media: see text].