Small Heterodimer Partner (SHP) inhibits numerous transcription factors that are involved in diverse biological processes, including lipid and glucose metabolism. In response to increased hepatic bile acids, SHP gene expression is induced and the SHP protein is stabilized. We now show that the activity of SHP is also increased by posttranslational methylation at Arg-57 by protein arginine methyltransferase 5 (PRMT5). Adenovirus-mediated hepatic depletion of PRMT5 decreased SHP methylation and reversed the suppression of metabolic genes by SHP. Mutation of Arg-57 decreased SHP interaction with its known cofactors, Brm, mSin3A, and histone deacetylase 1 (HDAC1), but not with G9a, and decreased their recruitment to SHP target genes in mice. Hepatic overexpression of SHP inhibited metabolic target genes, decreased bile acid and hepatic triglyceride levels, and increased glucose tolerance. In contrast, mutation of Arg-57 selectively reversed the inhibition of SHP target genes and metabolic outcomes. The importance of Arg-57 methylation for the repression activity of SHP provides a molecular basis for the observation that a natural mutation of Arg-57 in humans is associated with the metabolic syndrome. Targeting posttranslational modifications of SHP may be an effective therapeutic strategy by controlling selected groups of genes to treat SHP-related human diseases, such as metabolic syndrome, cancer, and infertility.Small Heterodimer Partner (SHP) (NR0B2) was discovered as a unique member of the nuclear receptor superfamily that lacks a DNA binding domain but contains a putative ligand binding domain (32). SHP forms nonfunctional heterodimers with DNA binding transcriptional factors, including nuclear receptors, and thereby acts as a transcriptional corepressor in diverse biological processes, including metabolism, cell proliferation, apoptosis, and sexual maturation (1,3,11,35,36,39). Well-studied hepatic functions of SHP are the inhibition of bile acid biosynthesis, fatty acid synthesis, and glucose production in response to bile acid signaling (1,3,4,12,19,22,37,38). We previously showed that SHP inhibits the expression of a key bile acid biosynthetic gene, the CYP7A1 (cholesterol 7␣ hydroxylase) gene, by coordinately recruiting chromatin-modifying repressive cofactors, mSin3A/histone deacetylase 1 (HDAC1), NCoR/ HDAC3, methyltransferase G9a, and the Swi/Snf-Brm remodeling complex, to the CYP7A1 gene promoter (9,16,25). GPS2, a subunit of the NCoR corepressor complex, was recently shown to act as a SHP cofactor and participates in differential regulation of bile acid biosynthetic genes, the CYP7A1 and CYP8B1 (sterol 12␣ hydroxylase) genes (31).Consistent with its important functions in metabolic pathways, naturally occurring heterozygous mutations in the SHP gene have been associated with human metabolic disorders (7,8,27). About 30% of these reported mutations occur at arginine residues, implying that functionally relevant posttranslational modification (PTM) at these sites may be important for SHP function. In r...