HuD is an RNA-binding protein that has been shown to induce neuronal differentiation by stabilizing labile mRNAs carrying AU-rich instability elements. Here, we show a novel mechanism of arginine methylation of HuD by coactivator-associated arginine methyltransferase 1 (CARM1) that affected mRNA turnover of p21cip1/waf1 mRNA in PC12 cells. CARM1 specifically methylated HuD in vitro and in vivo and colocalized with HuD in the cytoplasm. Inhibition of HuD methylation by CARM1 knockdown elongated the p21cip1/waf1 mRNA half-life and resulted in a slow growth rate and robust neuritogenesis in response to nerve growth factor (NGF). Methylation-resistant HuD bound more p21cip1/waf1 mRNA than did the wild type, and its overexpression upregulated p21cip1/waf1 protein expression. These results suggested that CARM1-methylated HuD maintains PC12 cells in the proliferative state by committing p21cip1/waf1 mRNA to its decay system. Since the methylated population of HuD was reduced in NGF-treated PC12 cells, downregulation of HuD methylation is a possible pathway through which NGF induces differentiation of PC12 cells.