Neurogenin 3 (NGN3) is a key transcription factor in the cell fate determination of endocrine progenitors (EPs) in the developing pancreas. Previous studies have shown that the stability and activity of NGN3 are regulated by phosphorylation. However, the role of NGN3 methylation is poorly understood. Here, we report that protein arginine methyltransferase-1 (PRMT1)-mediated arginine 65 methylation of NGN3 is required for the pancreatic endocrine development of human embryonic stem cells (hESCs) in vitro. We found that inducible PRMT1-knockout (P-iKO) hESCs did not differentiate from EPs into endocrine cells (ECs) in the presence of doxycycline. Loss of PRMT1 caused NGN3 accumulation in the cytoplasm of EPs and decreased the transcriptional activity of NGN3. We found that PRMT1 specifically methylates NGN3 arginine 65 and that this modification is a prerequisite for ubiquitin-mediated degradation. Our findings demonstrate that arginine 65 methylation of NGN3 is a key molecular switch in hESCs permitting their differentiation into pancreatic ECs. Pancreas: Development of hormone-producing cellsExamination of the endocrine (hormone-producing) cells of the pancreas reveals how the modification of a key regulatory protein acts as a molecular switch to ensure the development of endocrine cells. In the developing pancreas, the transcription factor neurogenin 3 (NGN3) plays a critical role in triggering differentiation of human embryonic stem cells (hESCs) into endocrine cells. NGN3 then degrades rapidly, but the exact details of this process are unclear. Using human cell lines, Yong-Mahn Han and co-workers at the Korea Advanced Institute of Science and Technology, Daejeon, South Korea, demonstrated that a particular amino acid on NGN3 is the target for the protein arginine methyltransferase-1 (PRMT1). PRMT1 methylates arginine 65, and this modification permits the expression of certain genes before triggering NGN3 degradation. Stem cells without PRMT1 failed to differentiate, and NGN3 accumulated in the cell cytoplasm rather than degrading.