Methylation of arginine residues within histone H3 has been linked to active transcription. This modification appears on the estrogen-regulated pS2 promoter when the CARM1 methyltransferase is recruited during transcriptional activation. Here we describe a process, deimination, that converts histone arginine to citrulline and antagonizes arginine methylation. We show that peptidyl arginine deiminase 4 (PADI4) specifically deiminates, arginine residues R2, R8, R17, and R26 in the H3 tail. Deimination by PADI4 prevents arginine methylation by CARM1. Dimethylation of arginines prevents deimination by PADI4 although monomethylation still allows deimination to take place. In vivo targeting experiments on an endogenous promoter demonstrate that PADI4 can repress hormone receptor-mediated gene induction. Consistent with a repressive role for PADI4, this enzyme is recruited to the pS2 promoter following hormone induction when the gene is transcriptionally downregulated. The recruitment of PADI4 coincides with deimination of the histone H3 N-terminal tail. These results define deimination as a novel mechanism for antagonizing the transcriptional induction mediated by arginine methylation.