Hu proteins have been identified as target antigens in the sera of patients with paraneoplastic encephalomyelitis, an autoimmune disease associated with small-cell lung cancer and neuroblastoma (20, 64). The four members of the Hu protein family have been identified as RNA-binding proteins (RBPs) that show homology to the Drosophila melanogaster ELAV protein (27, 28, 42, 52, 56). These mammalian Hu/ELAV proteins, with the exception of HuR, are expressed exclusively in neurons (20, 45, 52). Hu family proteins share the characteristic of three RNA recognition motif domains (RRMs), with a hinge region intervening between the second and the third RRMs (27, 28, 56). In previous reports, Hu proteins had been reported to bind to long poly(A)+ tails (1, 46), but recent studies demonstrated that they recognize AU-rich elements (AREs) which reside in the 3′-untranslated regions (3′-UTRs) of some labile mRNA species (33, 40, 42, 53, 54) and determine their stability or translational efficiency (6, 7, 23, 29, 37). HuD, one of the Hu family proteins, has been shown to bind to AREs found in the 3′-UTRs of several mRNAs, including c-fos (14), tau (9), GAP43 (15), and p21cip1/waf1 (30), and to the U-rich element found in the p27 mRNA 5′-UTR (36). Previously, it was reported that overexpression of HuD induces neuronal differentiation in PC12 cells, cortical primary culture neurons, and retinoic acid-induced teratocarcinoma cell lines (5). On the other hand, antisense-mediated knockdown of HuD resulted in the inhibition of neurite extension in PC12 cells (48) and HuD-deficient mice exhibited a larger population of dividing stem cells in the adult subventricular zone (3). These findings indicated that HuD is required for neuronal differentiation processes, including growth arrest and cell fate acquisition of neural stem/progenitor cells, and possibly for sprouting and regeneration of mature neurons. Given that HuD-bound gene products are involved in cell cycle arrest (p21cip1/waf1 and p27), neurite outgrowth (GAP43 and tau), and functional differentiation (choline acetyltransferase) (21), HuD is presumed to induce the neuronal cell shape by exerting a protective effect on these ARE-containing labile mRNAs by antagonizing ARE-mediated mRNA decay. In the case of nerve growth factor (NGF)-induced differentiation of PC12 cells, NGF alters the RNA binding property of HuD towards AREs in the course of differentiation. However, there is no evidence revealing how HuD-ARE interactions are regulated under the NGF signal transduction pathway. We note that HuR, a ubiquitously distributed Hu protein, was arginine methylated by coactivator-associated arginine methyltransferase 1 (CARM1) in the myeloid cell line when the cells were stimulated by lipopolysaccharide (41). However, functional differences between methylated and unmethylated HuR have not yet been elucidated. Since the four mammalian Hu proteins (HuR, HuB, HuC, and HuD) are quite akin to each other in amino acid sequence (27, 52), we explored the possibility that HuD is also methylated at the corresponding arginine residue to HuR. RBPs are the major substrate group for protein arginine methyltransferases (PRMTs) (8, 26, 34, 37, 43, 47, 49, 50, 57, 60, 61, 67). Most RBPs contain GAR domains, which consist of a repetition of RGG or RXR (X is an aliphatic residue) (11, 58) and are the canonical targets for type I PRMTs that catalyze the formation of asymmetric NG,NG-dimethylarginine residues (37, 49). Type I enzymes PRMT1 and PRMT3 favor GAR domains as their substrates (18, 25, 66), and especially PRMT1 has a promiscuity to methylate arginine residues encompassed by GAR domains (65, 66). On the other hand, another type I enzyme, CARM1, methylates a narrow spectrum of proteins, histone H3 (12, 44), p300/CBP (69), PABP1, and TARPP (39), all of which lack GAR-like domains around the arginine residues. HuR also lacks the canonical GAR domain but instead has an alanine residue 2 residues N-terminal before the methylated arginine, which is common to most of the CARM1 substrates (41). In this report, we first demonstrated that HuD is also an in vivo and in vitro substrate for CARM1 by 3H labeling and immunodetection of the methylarginine residue of which Arg236 is mapped as the methylated residue by CARM1. Though CARM1 was so far reported to reside predominantly in the cell nuclei, in PC12 cells CARM1 distribution ranges from the nuclei to the cytoplasm, including the cell peripheries, and CARM1 is colocalized with HuD in the cytoplasm. To examine the biological significance of HuD methylation by CARM1, we established CARM1-depleted PC12 cell lines and investigated the effect of CARM1 loss on HuD-regulated gene expression. In a series of CARM1-depleted cell lines, methylated HuD was completely lost, with the total HuD level being unchanged, and the p21cip1/waf1 protein levels was remarkably increased compared with levels in parental PC12 cells. Further, we demonstrated that unmethylated HuD bound more p21cip1/waf1 mRNA than did methylated HuD and led to prolongation of p21cip1/waf1 mRNA half-life. This phenomenon was reproduced in the PC12 cells overexpressing R236K methylation-resistant HuD. p21cip1/waf1 cyclin-dependent kinase inhibitor has been shown to inhibit the proliferation of PC12 cells and accelerate neurite outgrowth in response to NGF (22, 71, 72). As anticipated, these cells exhibited a slower growth rate in the growth medium and accelerated neuritogenesis in response to NGF than did the parental and mock-transfected PC12 cells. These findings indicated that CARM1 negatively regulates neuronal differentiation of PC12 cells by methylating HuD to prevent p21cip1/waf1 mRNA from entering into the decay pathway. The overlapped distribution of CARM1 with BrdU-positive cells in the subventricular zone of the adult mouse generalizes the inhibitory role of CARM1 for the differentiation of neural progenitor/precursor cells as well as PC12 cells.