The formation of synapses during neuronal development is essential for establishing neural circuits and a nervous system1. Every presynapse builds a core 'active zone' structure, where ion channels cluster and synaptic vesicles release their neurotransmitters2. Although the composition of active zones is well characterized2,3, it is unclear how active-zone proteins assemble together and recruit the machinery required for vesicle release during development. Here we find that the core active-zone scaffold proteins SYD-2 (also known as liprin-α) and ELKS-1 undergo phase separation during an early stage of synapse development, and later mature into a solid structure. We directly test the in vivo function of phase separation by using mutant SYD-2 and ELKS-1 proteins that specifically lack this activity. These mutant proteins remain enriched at synapses in Caenorhabditis elegans, but show defects in active-zone assembly and synapse function. The defects are rescued by introducing a phase-separation motif from an unrelated protein. In vitro, we reconstitute the SYD-2 and ELKS-1 liquid-phase scaffold, and find that it is competent to bind and incorporate downstream active-zone components. We find that the fluidity of SYD-2 and ELKS-1 condensates is essential for efficient mixing and incorporation of active-zone components. These data reveal that a developmental liquid phase of scaffold molecules is essential for the assembly of the synaptic active zone, before maturation into a stable final structure.