A theory is presented of the phase separation of supercoiled DNA into a nucleoid in a bacterial cell. The suspension consists of DNA interacting with globular proteins in excess salt. A cross virial between DNA and a protein is computed as well as the DNA self-energy arising from excluded volume. The cellular parameters of Escherichia coli would appear to be compatible with the thermodynamic equilibrium derived theoretically. The state of superhelical DNA in the nucleoid could be liquid crystalline and rippled.