The retinoblastoma protein (pRb/p105) tumor suppressor plays a pivotal role in cell cycle regulation by blockage of the G1-to-S-phase transition. pRb tumor suppressor activity is governed by a variety of posttranslational modifications, most notably phosphorylation by cyclin-dependent kinase (Cdk) complexes. Here we report a novel regulation of pRb through protein arginine methyltransferase 4 (PRMT4)-mediated arginine methylation, which parallels phosphorylation. PRMT4 specifically methylates pRb at the pRb C-terminal domain (pRb C(term)) on arginine (R) residues R775, R787, and R798 in vitro and R787 in vivo. Arginine methylation is important for efficient pRb C(term) phosphorylation, as manifested by the reduced phosphorylation of a methylation-impaired mutant, pRb (R3K). A methylmimetic form of pRb, pRb (R3F), disrupts the formation of the E2F-1/DP1-pRb complex in cells as well as in an isolated system. Finally, studies using a Gal4-E2F-1 reporter system show that pRb (R3F) expression reduces the ability of pRb to repress E2F-1 transcriptional activation, while pRb (R3K) expression further represses E2F-1 transcriptional activation relative to that for cells expressing wild-type pRb. Together, our results suggest that arginine methylation negatively regulates the tumor suppressor function of pRb during cell cycle control, in part by creating a better substrate for Cdk complex phosphorylation and disrupting the interaction of pRb with E2F-1.