Methylation is one of the many post-translational modifications that modulate protein function. Although asymmetric NG,NG-dimethylation of arginine residues in glycine-arginine-rich domains of eucaryotic proteins, catalyzed by type I protein arginine N-methyltransferases (PRMT), has been known for some time, members of this enzyme class have only recently been cloned. The first example of this type of enzyme, designated PRMT1, cloned because of its ability to interact with the mammalian TIS21 immediate-early protein, was then shown to have protein arginine methyltransferase activity. We have now isolated rat and human cDNA orthologues that encode proteins with substantial sequence similarity to PRMT1. A recombinant glutathione S-transferase (GST) fusion product of this new rat protein, named PRMT3, asymmetrically dimethylates arginine residues present both in the designed substrate GST-GAR and in substrate proteins present in hypomethylated extracts of a yeast rmt1 mutant that lacks type I arginine methyltransferase activity; PRMT3 is thus a functional type I protein arginine N-methyltransferase. However, rat PRMT1 and PRMT3 glutathione S-transferase fusion proteins have distinct enzyme specificities for substrates present in both hypomethylated rmt1 yeast extract and hypomethylated RAT1 embryo cell extract. TIS21 protein modulates the enzymatic activity of recombinant GST-PRMT1 fusion protein but not the activity of GST-PRMT3. Western blot analysis of gel filtration fractions suggests that PRMT3 is present as a monomer in RAT1 cell extracts. In contrast, PRMT1 is present in an oligomeric complex. Immunofluorescence analysis localized PRMT1 predominantly to the nucleus of RAT1 cells. In contrast, PRMT3 is predominantly cytoplasmic.