Arginine methylation is a post-translational modification that affects many cellular processes in eukaryotes. The malaria parasite Plasmodium falciparum encodes three conserved PRMTs (protein arginine N-methyltransferases). We have determined that PfPRMT1 (P. falciparum PRMT1) has authentic type I PRMT activity to form monomethylarginines and asymmetric dimethylarginines. Compared with mammalian PRMT1s, PfPRMT1 possesses a distinctive N-terminal sequence that is approximately 50 amino acids longer and is essential for enzyme activity. Recombinant PfPRMT1 methylated histones H4 and H2A and several conserved substrates involved in RNA metabolism, including fibrillarin, poly(A)-binding protein II, ribosomal protein S2 and a putative splicing factor. Using synthetic peptides and MS, we determined target arginines in several substrates and studied the enzyme kinetics. Whereas the kinetic parameters of recombinant PfPRMT1 on an H4 peptide and S-adenosylmethionine were similar to those of mammalian PRMT1s, PfPRMT1 had much higher substrate-turnover rates. In the histone H4 N-terminus, PfPRMT1 could methylate only Arg3, a mark for transcription activation. Western blotting detected dynamic dimethylation of H4-Arg3 during parasite development, suggesting that histone-arginine methylation may play a conserved role in chromatin-mediated gene regulation. Consistent with the presence of potential substrates in both the cytoplasm and nucleus, green fluorescent protein-tagged PfPRMT1 and untagged PfPRMT1 were localized in both cellular compartments, with the majority in the cytoplasm. in vitro assays showed that PfPRMT1 could be inhibited by several small-molecule inhibitors, with IC50-values in the sub-micromolar range. Most of these compounds also effectively inhibited parasite growth, suggesting that parasite PRMTs are promising targets for developing antiparasitic drugs.