The EWS gene is known to be chromosomally translocated and fused to various members of the DNA-binding transcription factors in Ewing's sarcoma and primitive neuroectodermal tumor. The product of this gene encodes the N-terminal transcriptional activation domain and the C-terminal RNA-binding domain containing an RNA-recognition motif and three arginine-glycine-glycine rich (RGG) motifs. Recently, we demonstrated EWS as a coactivator for hepatocyte nuclear factor 4 (HNF4)-mediated transcription. However, regulatory factors controlling EWS function are poorly characterized. In this study, we found that a protein arginine methyltransferase, PRMT1, physically interacts with EWS, whose cellular localization depends upon its RGG motifs targeted for methylation. Overexpression of PRMT1 down-regulates coactivator activity of EWS for HNF4-mediated transcription, because of the cytoplasmic retention of EWS from the nucleus. These results suggest that PRMT1 plays a post-translationally important role in regulating the transcriptional activity.