Liquid-liquid phase separation (LLPS) is important to control a wide range of reactions from gene expression to protein degradation in a cell-sized space. To bring a better understanding of the compatibility of such phase-separated structures with protein synthesis, we study emergent LLPS in a cell-free transcription-translation (TXTL) reaction. When the TXTL reaction composed of many proteins is concentrated, the uniformly mixed state becomes unstable, and membrane-less phases form spontaneously. This LLPS droplet formation is induced when the TXTL reaction is enclosed in water-in-oil emulsion droplets, in which water evaporates from the surface. As the emulsion droplets shrink, smaller LLPS droplets appear inside the emulsion droplets and coalesce into large phase-separated domains that partition the localization of synthesized reporter proteins. The presence of PEG in the TXTL reaction is important not only for versatile cell-free protein synthesis but also for the formation of two large domains capable of protein partitioning. Our results may shed light on the dynamic interplay of LLPS formation and cell-free protein synthesis toward the construction of synthetic organelles.