Studies with the myogenic basic helix-loop-helix and MADS box factors suggest that efficient transactivation is dependent on the recruitment of the steroid receptor coactivator (SRC) and the cofactors p300 and p300/CBP-associated factor. SRCs have been demonstrated to recruit CARM1 (coactivator-associated arginine methyltransferase-1), a member of the S-adenosyl-l-methionine-dependent PRMT1-5 (protein-arginine N-methyltransferase-1-5) family, which catalyzes the methylation of arginine residues. This prompted us to investigate the functional role of CARM1/PRMT4 during skeletal myogenesis. We demonstrate that CARM1 and the SRC cofactor GRIP-1 cooperatively stimulate the activity of myocyte enhancer factor-2C (MEF2C). Moreover, there are direct interactions among MEF2C, GRIP-1, and CARM1. Chromatin immunoprecipitation demonstrated the in vivo recruitment of MEF2 and CARM1 to the endogenous muscle creatine kinase promoter in a differentiation-dependent manner. Furthermore, CARM1 is expressed in somites during embryogenesis and in the nuclei of muscle cells. Treatment of myogenic cells with the methylation inhibitor adenosine dialdehyde or tet-regulated CARM1 "antisense" expression did not affect expression of MyoD. However, inhibition of CARM1 inhibited differentiation and abrogated the expression of the key transcription factors (myogenin and MEF2) that initiate the differentiation cascade. This work clearly demonstrates that the arginine methyltransferase CARM1 potentiates myogenesis and supports the positive role of arginine methylation in mammalian differentiation.