In cells, the curved clathrin structures in vesicle budding are well characterized, while the flat ones remain poorly understood. Here, we reconstitute the flat assembly of ESCRT-0 protein HRS and clathrin onto lipid membranes in vitro. HRS forms gel-like protein condensates at micromolar concentrations in solutions. These condensates spread as a two-dimensional layer on negatively charged membranes and, together with clathrin, form multilayered coats. Importantly, the two-dimensional condensates spontaneously form only on membranes at HRS concentrations below 50 nM, its cytoplasmic concentration. Correlative cryo-electron tomography of HRS-labelled endosomes in cells reveals a multilayered structure containing a flat clathrin layer 16 nm away from the membrane, consistent with our in vitro findings. Cholesterol enhances HRS recruitment to the membrane both in cells and in supported bilayers. Furthermore, cholesterol promotes the phase separation of HRS onto membranes, which in turn concentrates cholesterol underneath. This positive feedback promotes the formation of HRS-clathrin microdomains that sorts reconstituted ubiquitinated cargoes. Altogether, our results show that the distinct architecture of ESCRT-0 is assembled by the two-dimensional phase-separation of HRS which drives the assembly of flat clathrin coats.