<p>Mg²⁺ ion-dependent RNA liquid–liquid phase separation with lower critical solution temperatures is driven by the phosphate backbone and modulated by the solvation property of nucleobases. Here, we report a key role of the 2’-OH group of the ribose sugar in RNA condensation in the presence of divalent cations. We show that 2’-deoxyribose inhibits nucleic acid phase separation and suppresses the intra-condensate networking transition, known as percolation, that underlies condensate dynamical arrest. All-atom simulations reveal increased solvation and compaction of single-stranded DNA compared to RNA, suggesting an unintuitive role of chain flexibility in modulating heat-induced nucleic acid phase separation and percolation transitions. Further, 2’-O-methylation (2’-O-Me) of RNA, a common sugar modification, lowers the driving force of RNA phase transitions. These results highlight the diverse physicochemical parameters governing nucleic acid phase behavior and suggest how sugar modifications may have evolved to robustly tune the formation and dynamical arrest of RNA condensates.</p>