The retinoblastoma gene product (RB) is an important regulator of E2F activity. RB recruits a number of proteins, including HDACs, SWI/SNF complex, lysine methyl transferase (SUV39H1) and DNA methyltransferase (DNMT1), all of which negatively regulate E2F activity with RB. Here, we show that RB interacts with PRMT2, a member of the protein arginine methyltransferase family, to regulate E2F activity. PRMT2 directly bound and interacted with RB through its AdoMet binding domain, in contrast to other PRMT proteins, including PRMT1, PRMT3 and PRMT4. In reporter assays, PRMT2 repressed E2F1 transcriptional activity in an RB-dependent manner. PRMT2 formed a ternary complex with E2F1 in the presence of RB. To further explore the role of endogenous PRMT2 in the regulation of E2F activity, the PRMT2 gene was ablated in mice by gene targeting. Compared with PRMT2(+/+) mouse embryonic fibroblasts (MEFs), PRMT2(-/-) MEFs demonstrated increased E2F activity and early S phase entry following release of serum starvation. Vascular injury to PRMT2(-/-) arteries results in a hyperplastic response, consistent with increased G1-S phase progression. Taken together, these findings demonstrate a novel mechanism for the regulation of E2F activity by a member of the protein arginine methyltransferase family.