Molecular diversity through alternative splicing is important for cellular function and development. However, little is known about the factors that regulate alternative splicing. Here we demonstrate that one isoform of coactivator-associated arginine methyltransferase 1 (named CARM1-v3) associates with the U1 small nuclear RNP-specific protein U1C and affects 5' splice site selection of the pre-mRNA splicing. CARM1-v3 was generated by the retention of introns 15 and 16 of the primary transcript of CARM1. Its deduced protein lacks the C-terminal domain of the major isoform of CARM1 and instead has v3-specific sequences at the C terminus. CARM1-v3, but not the other isoforms, strongly stimulates a shift to the distal 5' splice site of the pre-mRNA when the adenoviral E1A minigene is used as a reporter and enhances the exon skips in the CD44 reporter. A CARM1-v3 mutant lacking the v3-specific sequences completely lost the ability to regulate the alternative splicing patterns. In addition, CARM1-v3 shows tissue-specific expression patterns distinct from those of the other isoforms. These results suggest that the transcriptional coactivator can affect the splice site decision in an isoform-specific manner.

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