Enzymes that mediate reversible epigenetic modifications have not only been recognized as key in regulating gene expression and oncogenesis, but also provide potential targets for molecular therapy. Although the methylation of arginine 3 of histone 4 (H4R3) by protein arginine methyltransferase 1 (PRMT1) is a critical modification for active chromatin and prevention of heterochromatin spread, there has been no direct evidence of any role of PRMTs in cancer. Here, we show that PRMT1 is an essential component of a novel Mixed Lineage Leukaemia (MLL) oncogenic transcriptional complex with both histone acetylation and H4R3 methylation activities, which also correlate with the expression of critical MLL downstream targets. Direct fusion of MLL with PRMT1 or Sam68, a bridging molecule in the complex for PRMT1 interaction, could enhance self-renewal of primary haematopoietic cells. Conversely, specific knockdown of PRMT1 or Sam68 expression suppressed MLL-mediated transformation. This study not only functionally dissects the oncogenic transcriptional machinery associated with an MLL fusion complex, but also uncovers--for the first time--an essential function of PRMTs in oncogenesis and reveals their potential as novel therapeutic targets in human cancer.