In eukaryotic cells, RNA-binding proteins (RBPs) interact with RNAs to form ribonucleoprotein complexes (RNA granules) that have long been thought to regulate RNA fate or activity. Emerging evidence suggests that some RBPs not only bind RNA but also possess enzymatic activity related to ubiquitin regulation, raising important questions of whether these RBP-formed RNA granules regulate ubiquitin signaling and related biological functions. Here, we show that Drosophila Otu binds RNAs and coalesces to membrane-less biomolecular condensates via its intrinsically disordered low-complexity domain, and coalescence represents a functional state for Otu exerting deubiquitinase activity. Notably, coalescence-mediated enzymatic activity of Otu is positively regulated by its bound RNAs and co-partner Bam. Further genetic analysis reveals that the Otu/Bam deubiquitinase complex and dTraf6 constitute a feedback loop to maintain intestinal immune homeostasis during aging, thereby controlling longevity. Thus, regulated biomolecular condensates may represent a mechanism that controls dynamic enzymatic activities and related biological processes.