This review summarizes the current status of protein arginine N-methylation reactions. These covalent modifications of proteins are now recognized in a number of eukaryotic proteins and their functional significance is beginning to be understood. Genes that encode those methyltransferases specific for catalyzing the formation of asymmetric dimethylarginine have been identified. The enzyme modifies a number of generally nuclear or nucleolar proteins that interact with nucleic acids, particularly RNA. Postulated roles for these reactions include signal transduction, nuclear transport, or a direct modulation of nucleic acid interactions. A second methyltransferase activity that symmetrically dimethylates an arginine residue in myelin basic protein, a major component of the axon sheath, has also been characterized. However, a gene encoding this activity has not been identified to date and the cellular function for this methylation reaction has not been clearly established. From the analysis of the sequences surrounding known arginine methylation sites, we have determined consensus methyl-accepting sequences that may be useful in identifying novel substrates for these enzymes and may shed further light on their physiological role.