Posttranslational modification of proteins within T cell receptor signaling cascades allows T lymphocytes to rapidly initiate an appropriate immune response. Here we report a role for arginine methylation in regulating cytokine gene transcription in the T helper lymphocyte. Inhibition of arginine methylation impaired the expression of several cytokine genes, including the signature type 1 and type 2 helper cytokines, interferon gamma, and interleukin-4. T cell receptor signaling increased expression of the protein arginine methyltransferase PRMT1, which in turn methylated the nuclear factor of activated T cells (NFAT) cofactor protein, NIP45. Arginine methylation of the amino terminus of NIP45 modulated its interaction with NFAT and resulted in augmented cytokine production, while T cells from mice lacking NIP45 had impaired expression of IFNgamma and IL-4. Covalent modification of NIP45 by arginine methylation is an important mechanism of regulating the expression of NFAT-dependent cytokine genes.