ABSTRACT Transcriptional induction of Heat Shock Protein ( HSP ) genes in yeast is accompanied by dynamic changes in their 3D structure and spatial organization, yet the molecular basis for these phenomena remains unknown. Using chromosome conformation capture and single cell imaging, we show that genes transcriptionally activated by Heat Shock Factor 1 (Hsf1) specifically interact across chromosomes and coalesce into diffraction-limited intranuclear foci. Genes activated by the alternative stress regulators Msn2 and Msn4, in contrast, do not interact among themselves nor with Hsf1 targets. Likewise, constitutively expressed genes, even those interposed between HSP genes, show no detectable interaction. Hsf1 forms discrete subnuclear puncta when stress-activated, and these puncta dissolve in concert with transcriptional attenuation, paralleling the kinetics of HSP gene coalescence and dissolution. Nuclear Hsf1 and RNA Pol II are both necessary for intergenic HSP gene interactions, while DNA-bound Hsf1 is necessary and sufficient to drive coalescence of a heterologous gene. Our findings demonstrate that Hsf1 can dynamically restructure the yeast genome.