Protein arginine methyltransferases (PRMT) have been implicated in the regulation of transcription. They are recruited to promoters via interaction with transcription factors and exert their coactivator function by methylating arginine residues in histones and other chromatin proteins. Here, we employ an unbiased approach to identify novel target genes, which are under the control of two members of the enzyme family, PRMT1 and CARM1/PRMT4 (coactivator associated arginine methyltransferase 1). By using cDNA microarray analysis, we find that the siRNA-mediated single knockdown of neither CARM1 nor PRMT1 causes significant changes in gene expression. In contrast, double knockdown of both enzymes results in the deregulated expression of a large group of genes, among them the CITED2 gene. Cytokine-stimulated expression analysis indicates that transcriptional activation of CITED2 depends on STAT5 and the coactivation of both PRMTs. ChIP analysis identifies the CITED2 gene as a direct target gene of STAT5, CARM1 and PRMT1. In reporter gene assays, we show that STAT5-mediated transcription is cooperatively enhanced by CARM1 and PRMT1. Interaction assays reveal a cytokine-induced association of STAT5 and the two PRMTs. Our data demonstrate a widespread cooperation of CARM1 and PRMT1 in gene activation as well as repression and that STAT5-dependent transcription of the CITED2 gene is a novel pathway coactivated by the two methyltransferases.