Nuclear domain 10 (ND10), also referred to as PML bodies or PODs, are discrete interchromosomal accumulations of several proteins including PML and Sp100. We describe here developments in the visualization of ND10 and the mechanism of ND10 assembly made possible by the identification of proteins that are essential for this process using cell lines that lack individual ND10-associated proteins. PML is critical for the proper Localization of all other ND10-associated proteins under physiological conditions. Introducing PML into a PML -/-cell line by transient expression or fusion with PML-producing cells recruited ND10-associated proteins into de novo formed ND10, attesting to its essential nature in ND10 formation. This recruitment includes Daxx, a protein that can bind PML and is highly enriched in, condensed chromatin in the absence of PML. The segregation of Daxx from condensed chromatin to ND10 by increased accumulation of Sentrin/SUMO-1 modified PML suggests the presence of a variable equilibrium between these two nuclear sites. These findings identify the basic requirements for ND10 formation and suggest a dynamic mechanism for protein recruitment to these nuclear domains controlled by the SUMO-1 modification state of PML. Additional adapter proteins are suggested to exist by the behavior of Sp100, and Sp100 will provide the basis for their identification. Further information about the dynamic balance of proteins between ND10 and the actual site of functional activity of these proteins will establish whether ND10 function as homeostatic regulators or only in storage of excess proteins destined for turnover.