Estrogen receptor alpha (ERα) is implicated in the initiation and progression of breast cancer and its transcription depends on the modulation of epigenetic changes at target gene promoters via coregulators. There is a critical need to understand the molecular mechanism(s) by which deregulation of epigenetic changes occurs during breast cancer progression. The ERα coregulator PELP1 plays an important role in ERα signaling and is a proto-oncogene with aberrant expression in breast cancer. PELP1 interacts with histones and may be a reader of chromatin modifications. We profiled PELP1's epigenetic interactome using a histone peptide array. Our results show that PELP1 recognizes histones modified by arginine and lysine dimethylation. PELP1 functionally interacts with the arginine methyltransferase CARM1 and their interaction is enhanced by ERα. PELP1-CARM1 interactions synergistically enhance ERα transactivation. Chromatin immunoprecipitation assays revealed that PELP1 alters histone H3 arginine methylation status at ERα target gene promoters. Pharmacological inhibition or small interfering RNA knockdown of CARM1 substantially reduced PELP1 oncogenic functions. The critical role of PELP1 status in modulating arginine methylation status was also observed through in vivo studies where PELP1 knockdown mediated decreased tumorigenesis correlated with decreased arginine dimethylation. Further, immunohistochemical analysis of human breast tumor tissues revealed co-overexpression of PELP1 and CARM1 in a subset of ERα-positive breast tumors. Our findings show PELP1 is a reader of histone arginine methyl modifications and deregulation promotes tumor proliferation via epigenetic alterations at ERα target promoters. Targeting these epigenetic alterations through inhibition of PELP1 and the arginine methyltransferases could be a promising cancer therapeutic.