The nucleolus is a multi-layered, membrane-less organelle made up of liquid-like biogenesis compartments surrounding an array of ribosomal RNA genes (rDNA). Biogenesis factors accumulate in the outer compartments through RNA binding and phase separation promoted by intrinsically disordered protein regions. In contrast, the nucleolar localization of rDNA binding proteins, which reside in the central chromatin compartment, is less well characterized. To gain mechanistic insight, we analyzed the localization, mitotic segregation, nucleic acid binding, and nuclear dynamics of the budding yeast rDNA binding protein Hmo1. Deletion of the main DNA binding domain, the HMG boxB, compromised Hmo1 transfer to daughter cells in mitosis and transcription independent rDNA-association, but still allowed nucleolar localization. The C-terminal lysine rich region turned out to be a combined nuclear and nucleolar localization sequence (NLS-NoLS). Its integrity was required for maximal enrichment and efficient retention of Hmo1 in the nucleolus and nucleolar localization of the ΔboxB construct. Moreover, the NLS-NoLS region was sufficient to promote nucleolar accumulation and bound nucleic acids in vitro with some preference for RNA. Bleaching experiments indicated mobility of Hmo1 inside the nucleolus, but little exchange with the nucleoplasm. Thus, a bi-layered targeting mechanism secures proper localization of Hmo1 to the nucleolus.