Spatiotemporal regulation of intracellular signaling molecules, such as the 3',5'-cyclic adenosine monophosphate (cAMP)-dependent protein kinase (PKA), ensures the specific execution of various cellular functions. Liquid-liquid phase separation (LLPS) of the ubiquitously expressed PKA regulatory subunit RIα was recently identified as a major driver of cAMP compartmentation and signaling specificity. However, the molecular determinants of RIα LLPS remain unclear. Here, we reveal that two separate dimerization interfaces combined with the cAMP-induced release of the PKA catalytic subunit (PKA-C) from the pseudosubstrate inhibitory sequence are required to drive RIα condensate formation in cytosol, which is antagonized by docking to A-kinase anchoring proteins. Strikingly, we find that the RIα pseudosubstrate region is critically involved in the formation of a non-canonical R:C complex, which serves to maintain low basal PKA activity in the cytosol by enabling the recruitment of active PKA-C to RIα condensates. Our results suggest that RIα LLPS not only facilitates cAMP compartmentation but also spatially restrains active PKA-C, thus highlighting the functional versatility of biomolecular condensates in driving signaling specificity.