The organisation of human chromosomes reversibly changes in cell division, and irreversibly in apoptosis or erythropoiesis by DNA condensation and fragmentation processes. Yet, how viral replication in the nucleus affects host and viral chromatin organisation remains poorly understood. Here we used dual-color click chemistry to image human adenovirus DNA replication, demonstrating host chromatin compaction during active expansion of the viral replication compartment (VRC). Early-replicated viral DNA (vDNA) segregated from VRC and lost phospho-serine5-RNA Pol-II and viral DNA-binding protein (DBP), while late-replicated vDNA retained active RNA Pol-II, besides viral RNA-splicing and DNA-packaging proteins. Depending on replication and the assembly protein 52K, the late-stage VRCs gave rise to progeny by droplet formation of vDNA with GFP-tagged virion protein V into 52K biomolecular condensates. The study reveals distinct functions of early and late-replicated vDNA and provides insight into active and passive liquid phase separated zones conducive to selective genome packaging of nascent virions.