Two structurally different poly(A)-binding proteins (PABP) bind the poly(A) tract of mRNAs in most mammalian cells: PABPC in the cytoplasm and PABP2/PABPN1 in the nucleus. Whereas yeast orthologs of the cytoplasmic PABP are characterized, a gene product homologous to mammalian PABP2 has not been identified in yeast. We report here the identification of a homolog of PABP2 as an arginine methyltransferase 1 (RMT1)-associated protein in fission yeast. The product of the Schizosaccharomyces pombe pab2 gene encodes a nonessential nuclear protein and demonstrates specific poly(A) binding in vitro. Consistent with a functional role in poly(A) tail metabolism, mRNAs from pab2-null cells displayed hyperadenylated 3'-ends. We also show that arginine residues within the C-terminal arginine-rich domain of Pab2 are modified by RMT1-dependent methylation. Whereas the arginine methylated and unmethylated forms of Pab2 behaved similarly in terms of subcellular localization, poly(A) binding, and poly(A) tail length control; Pab2 oligomerization levels were markedly increased when Pab2 was not methylated. Significantly, Pab2 overexpression reduced growth rate, and this growth inhibitory effect was exacerbated in rmt1-null cells. Our results indicate that the main cellular function of Pab2 is in poly(A) tail length control and support a biological role for arginine methylation in the regulation of Pab2 oligomerization.