Processing bodies (P-bodies) are membraneless organelles in eukaryotic cells that play a central role in mRNA metabolism, including mRNA decay, storage, and translational repression. However, the molecular mechanisms governing their assembly remain incompletely understood. Here, we identify the C-terminal domain of EDC4 as the minimal region required for P-body formation, with residues 1266–1401 driving phase separation and EDC4 condensation. To investigate the functional relevance of P-body integrity, we used the microprotein Nobody (NBDY) as a selective perturbation tool. Our results revealed that the NBDY 22–41 peptide directly binds the EDC4 C-terminal domain and inhibits its self-association, thereby selectively dissolving P-bodies without affecting the canonical mRNA decay pathway. Using this tool, we further examined the impact of P-body disruption on gene expression. Transcriptome profiling combined with quantitative validation revealed that P-body loss activates the p53 pathway and enhances the stability of associated transcripts. Consistent with these findings, clinical data show that NBDY overexpression is associated with p53 pathway activation in various cancers, and the NBDY 22–41 fragment reduces tumor cell proliferation and invasion, suggesting a potentially complex role of P-body dynamics in cancer biology. Together, our study defines the EDC4 C-terminal domain as a core scaffold for P-body assembly and uncovers a regulatory role of P-body dynamics in p53-mediated gene expression, with potential implications for cancer biology.