RUNX1/AML1 is required for the development of definitive hematopoiesis, and its activity is altered by mutations, deletions, and chromosome translocations in human acute leukemia. RUNX1 function can be regulated by post-translational modifications and protein-protein interactions. We show that RUNX1 is arginine-methylated in vivo by the arginine methyltransferase PRMT1, and that PRMT1 serves as a transcriptional coactivator for RUNX1 function. Using mass spectrometry, and a methyl-arginine-specific antibody, we identified two arginine residues (R206 and R210) within the region of RUNX1 that interact with the corepressor SIN3A and are methylated by PRMT1. PRMT1- dependent methylation of RUNX1 at these arginine residues abrogates its association with SIN3A, whereas shRNA against PRMT1 (or use of a methyltransferase inhibitor) enhances this association. We find arginine-methylated RUNX1 on the promoters of two bona fide RUNX1 target genes, CD41 and PU.1 and show that shRNA against PRMT1 or RUNX1 down-regulates their expression. These arginine methylation sites and the dynamic regulation of corepressor binding are lost in the leukemia-associated RUNX1-ETO fusion protein, which likely contributes to its dominant inhibitory activity. © 2008 by Cold Spring Harbor Laboratory Press.