SMN1, the causative gene for spinal muscular atrophy (SMA), plays a housekeeping role in the biogenesis of small nuclear RNA ribonucleoproteins. SMN is also present in granular foci along axonal projections of motoneurons, which are the predominant cell type affected in the pathology. These so-called RNA granules mediate the transport of specific mRNAs along neurites and regulate mRNA localization, stability, as well as local translation. Recent work has provided evidence suggesting that SMN may participate in the assembly of RNA granules, but beyond that, the precise nature of its role within these structures remains unclear. Here, we demonstrate that SMN associates with polyribosomes and can repress translation in an in vitro translation system. We further identify the arginine methyltransferase CARM1 as an mRNA that is regulated at the translational level by SMN and find that CARM1 is abnormally up-regulated in spinal cord tissue from SMA mice and in severe type I SMA patient cells. We have previously characterized a novel regulatory pathway in motoneurons involving the SMN-interacting RNA-binding protein HuD and CARM1. Thus, our results suggest the existence of a potential negative feedback loop in this pathway. Importantly, an SMA-causing mutation in the Tudor domain of SMN completely abolished translational repression, a strong indication for the functional significance of this novel SMN activity in the pathology.