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SOX10 is a transcription factor with well-known functions in neural crest and oligodendrocyte development. Mutations in SOX10 were first associated with Waardenburg-Hirschsprung disease (WS4; deafness, pigmentation defects and intestinal aganglionosis). However, variable phenotypes that extend beyond the WS4 definition are now reported. The neurological phenotypes associated with some truncating mutations are suggested to be the result of escape from the nonsense-mediated mRNA decay pathway; but, to date, no mechanism has been suggested for missense mutations, of which approximately 20 have now been reported, with about half of the latter shown to be redistributed to nuclear bodies of undetermined nature and function in vitro. Here, we report that p54NRB, which plays a crucial role in the regulation of gene expression during many cellular processes including differentiation, interacts synergistically with SOX10 to regulate several target genes. Interestingly, this paraspeckle protein, as well as two other members of the Drosophila behavior human splicing (DBHS) protein family, co-localize with SOX10 mutants in nuclear bodies, suggesting the possible paraspeckle nature of these foci or re-localization of the DBHS members to other subnuclear compartments. Remarkably, the co-transfection of wild-type and mutant SOX10 constructs led to the sequestration of wild-type protein in mutant-induced foci. In contrast to mutants presenting with additional cytoplasmic re-localization, those exclusively found in the nucleus alter synergistic activity between SOX10 and p54NRB. We propose that such a dominant negative effect may contribute to or be at the origin of the unique progressive and severe neurological phenotype observed in affected patients.