Protein N-arginine methyltransferase-1 (PRMT1), the major asymmetric arginine methyltransferase, plays important roles in various cellular processes. Previous reports have demonstrated that levels and activities of PRMT1 can vary in animals with type 2 diabetes mellitus. The aim of this study was to assess the expression and mechanism of action of PRMT1 during glucose toxicity-induced β cell dysfunction. Liposome-mediated gene transfection was used to transfect INS-1 cells with siPRMT1, which inhibits PRMT1 expression, and pALTER–FOXO1, which overexpresses forkhead box protein O1 (FOXO1). The cells were then cultured in media containing 5.6 or 25 mmol/L glucose with or without the small molecule PRMT1 inhibitor AMI-1 for 48 h. The protein levels of PRMT1, the arginine methylated protein α-metR, FOXO1, Phospho-FOXO1, pancreas duodenum homeobox-1 (PDX-1), and the intracellular localization of PDX-1 and FOXO1 were then measured by western blotting. FOXO1 methylation was detected by immunoprecipitated with anti-PRMT1 antibody and were immunoblotted with α-metR. The levels of insulin mRNA were measured by real-time fluorescence quantitative PCR. Glucose-stimulated insulin secretion (GSIS) and intracellular insulin content were measured using radioimmunoassays. Intracellular Ca2+ ([Ca2+]i) was detected using Fura-2 AM. Intracellular cAMP levels were measured using ELISA. Chronic exposure to high glucose impaired insulin secretion, decreased insulin mRNA levels and insulin content, increased intracellular [Ca2+]i and cAMP levels, and abolishes their responses to glucose. Inhibiting PRMT1 expression improved insulin secretion, increased mRNA levels and insulin content by regulating the intracellular translocation of PDX-1 and FOXO1, decreasing the methylation of FOXO1, and reducing intracellular [Ca2+]i and cAMP concentrations. Transient overexpression of constitutively active FOXO1 in nuclear reversed the AMI-1-induced improvement of β cell function without changing arginine methylation. It is concluded therefore that PRMT1 regulates GSIS in INS-1 cells, through enhanced methylation-induced nuclear localization of FOXO1, which subsequently suppresses the nuclear localization of PDX-1. Our results suggest a novel mechanism that might contribute to the deficient insulin secretion observed under conditions of chronically hyperglycemia.