In this report, we have investigated the impact of arginine methylation on the Gar1, Nop1, and Nsr1 nucleolar proteins in Saccharomyces cerevisiae. Although previous reports have established that protein arginine methylation is important for nucleocytoplasmic shuttling, they have focused on the examination of heterogeneous nuclear ribonucleoproteins (hnRNPs). We have extended this analysis to several nucleolar proteins that represent a distinct functional class of arginine-methylated proteins. We first developed an in vivo assay to identify proteins methylated by the Hmt1 arginine methyltransferase. This assay is based on the fact that the Hmt1 enzyme utilizes S-Adenosyl-L-methionine as the methyl donor for protein arginine methylation. Following SDS polyacrylamide electrophoresis, 11 distinct proteins were identified as substrates for the Hmt1 methyltransferase. Hmt1p overexpression did not increase the methylation level on these proteins, suggesting they are fully methylated under the conditions examined. Three of the radiolabeled proteins were confirmed to be Gar1p, Nop1p, and Nsr1p. To monitor the cellular localization of these proteins, functional GFP fusion proteins were generated and found to be localized to the nucleolus. This localization was independent of arginine methylation. Furthermore, all three proteins examined did not export to the cytoplasm. In contrast, arginine methylation is required for the export of the nuclear RNA-binding proteins Npl3p, Hrp1p, and Nab2p. The observation that three nucleolar proteins are modified by Hmt1p but are not exported from the nucleolus implies an alternate role for arginine methylation.