Cytosolic aggregation of the RNA binding protein TDP-43 (transactive response DNA-binding protein 43) is a hallmark of amyotrophic lateral sclerosis and frontotemporal dementia. Here, we report that during oxidative stress, TDP-43 becomes SUMO2/3-ylated by the SUMO E3 ligase protein PIAS4 (protein inhibitor of activated STAT 4) and enriches in cytoplasmic stress granules (SGs). Upon pharmacological inhibition of TDP-43 SUMO2/3-ylation or PIAS4 depletion, TDP-43 enrichment in SGs is accompanied by irreversible aggregation. In cells that are unable to assemble SGs, SUMO2/3-ylation of TDP-43 is strongly impaired, supporting the notion that SGs are compartments that promote TDP-43 SUMO2/3-ylation during oxidative stress. Binding of TDP-43 to UG-rich RNA antagonizes PIAS4-mediated SUMO2/3-ylation, while RNA dissociation promotes TDP-43 SUMO2/3-ylation. We conclude that SUMO2/3 protein conjugation is a cellular mechanism to stabilize cytosolic RNA-free TDP-43 against aggregation.