Signal transducer and activator of transcription 6 is a transcription factor important for the development of Th2 cells and regulation of gene expression by IL-4 and IL-13. It has been reported that STAT1 activity is regulated by methylation of a conserved arginine residue in the N-terminal domain. Methylation of STAT6 has not yet been explored. We observed methylation of STAT6 in cells transfected with wild-type STAT6, but not in cells transfected with Arg(27)Ala mutant, confirming that STAT6 is methylated on Arg(27). Transfectants expressing mutant Arg(27)Ala STAT6 displayed markedly diminished IL-4-dependent STAT6 phosphorylation and nuclear translocation, and no STAT6 DNA-binding activity compared with wild-type STAT6 transfectants. To confirm this, the experiments were repeated using inhibitors of methylation. In the presence of methylation inhibitors, STAT6 methylation was diminished, as was phosphorylation of STAT6 and STAT6 DNA-binding activity. Thus, methylation is a critical regulator of STAT6 activity, necessary for optimal STAT6 phosphorylation, nuclear translocation, and DNA-binding activity. Furthermore, methylation of STAT6 has distinct effects from those reported with STAT1.