The SARS-CoV-2 nucleocapsid (N) protein is an abundant RNA-binding protein critical for viral genome packaging, yet the molecular details that underlie this process are poorly understood. Here we combine single-molecule spectroscopy with all-atom simulations to uncover the molecular details that contribute to N protein function. N protein contains three dynamic disordered regions that house putative transiently-helical binding motifs. The two folded domains interact minimally such that full-length N protein is a flexible and multivalent RNA-binding protein. N protein also undergoes liquid-liquid phase separation when mixed with RNA, and polymer theory predicts that the same multivalent interactions that drive phase separation also engender RNA compaction. We offer a simple symmetry-breaking model that provides a plausible route through which single-genome condensation preferentially occurs over phase separation, suggesting that phase separation offers a convenient macroscopic readout of a key nanoscopic interaction.