Transcriptional induction by interferons requires the tyrosine and serine phosphorylation of the STAT1 transcription factor as well as its amino-terminal arginine methylation. Here we show that arginine methylation of STAT1 controls the rate of STAT1 dephosphorylation by modulating its interaction with PIAS1 and the nuclear tyrosine phosphatase TcPTP. Inhibition of STAT1 arginine methylation, or mutation of STAT1 Arg-31, results in a prolonged half-life of STAT1 tyrosine phosphorylation. This effect appears to be mediated by an increased binding of PIAS1 to STAT1 in the absence of STAT1 arginine methylation and a concomitant decrease in the association of STAT1 with TcPTP. Furthermore, inhibitors of arginine methylation require the presence of PIAS1 to exert their negative regulatory effect on the dephosphorylation of STAT1.
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