Cellular signalling cascades regulate the activity of transcription factors that convert extracellular information into gene regulation. C/EBPbeta is a ras/MAPkinase signal-sensitive transcription factor that regulates genes involved in metabolism, proliferation, differentiation, immunity, senescence, and tumourigenesis. The protein arginine methyltransferase 4 PRMT4/CARM1 interacts with C/EBPbeta and dimethylates a conserved arginine residue (R3) in the C/EBPbeta N-terminal transactivation domain, as identified by mass spectrometry of cell-derived C/EBPbeta. Phosphorylation of the C/EBPbeta regulatory domain by ras/MAPkinase signalling abrogates the interaction between C/EBPbeta and PRMT4/CARM1. Differential proteomic screening, protein interaction studies, and mutational analysis revealed that methylation of R3 constraines interaction with SWI/SNF and Mediator complexes. Mutation of the R3 methylation site alters endogenous myeloid gene expression and adipogenic differentiation. Thus, phosphorylation of the transcription factor C/EBPbeta couples ras signalling to arginine methylation and regulates the interaction of C/EBPbeta with epigenetic gene regulatory protein complexes during cell differentiation.