The coactivator-associated arginine methyltransferase (CARM1) functions as a regulator of transcription by methylating a diverse array of substrates. To broaden our understanding of CARM1's mechanistic actions, we sought to identify additional substrates for this enzyme. To do this, we generated CARM1 substrate motif antibodies, and used immunoprecipitation coupled with mass spectrometry to identify cellular targets of CARM1, including mediator complex subunit 12 (MED12) and the lysine methyltransferase KMT2D. Both of these proteins are implicated in enhancer function. We identified the major CARM1-mediated MED12 methylation site as arginine 1899 (R1899), which interacts with the Tudor domain-containing effector molecule, TDRD3. Chromatin immunoprecipitation-seq studies revealed that CARM1 and the methyl mark it deposits are tightly associated with ERα-specific enhancers and positively modulate transcription of estrogen-regulated genes. In addition, we showed that the methylation of MED12, at the R1899 site, and the recruitment of TDRD3 by this methylated motif are critical for the ability of MED12 to interact with activating noncoding RNAs.