Cancer-derived loss-of-function mutations in the KEAP1 tumor suppressor gene stabilize the NRF2 transcription factor, resulting in a pro-survival gene expression program that alters cellular metabolism and neutralizes oxidative stress. In a recent genotype-phenotype study, we classified 40% of KEAP1 mutations as ANCHOR mutants. By immunoprecipitation, these mutants bind more NRF2 than wild-type KEAP1 and ubiquitylate NRF2, but are incapable of promoting NRF2 degradation. BioID-based protein interaction studies confirmed increased abundance of NRF2 within the KEAP1 ANCHOR mutant complexes with no other statistically significant changes to the complexes. Discrete molecular dynamic simulation modeling and limited proteolysis suggest that the ANCHOR mutations stabilize residues in KEAP1 that contact NRF2. The modeling supports an intramolecular salt bridge between the R470C ANCHOR mutation and E493; mutation of the E493 residue confirmed the model, resulting in the ANCHOR phenotype. In live cells, the KEAP1 R320Q and R470C ANCHOR mutants co-localize with NRF2, p62/SQSTM1, and polyubiquitin in structured spherical droplets that rapidly fuse and dissolve. Transmission electron microscopy coupled with confocal fluorescent imaging revealed membraneless phase-separated biomolecular condensates. We present a model wherein ANCHOR mutations form p62-dependent biomolecular condensates that may represent a transitional state between impaired proteasomal degradation and autophagy.