Protein arginine methyltransferase 5 (PRMT5) plays multiple roles in a large number of cellular processes, and its subcellular localization is dynamically regulated during mouse development and cellular differentiation. However, little is known of the functional differences between PRMT5 in the cytoplasm and PRMT5 in the nucleus. Here, we demonstrated that PRMT5 predominantly localized in the cytoplasm of prostate cancer cells. Subcellular localization assays designed to span the entire open-reading frame of the PRMT5 protein revealed the presence of three nuclear exclusion signals (NESs) in the PRMT5 protein. PRMT5 and p44/MED50/WD45/WDR77 co-localize in the cytoplasm, and both are required for the growth of prostate cancer cells in an PRMT5 methyltransferase activity-dependent manner. In contrast, PRMT5 in the nucleus inhibited cell growth in a methyltransferase activity-independent manner. Consistent with these observations, PRMT5 localized in the nucleus in benign prostate epithelium, whereas it localized in the cytoplasm in prostate premalignant and cancer tissues. We further found that PRMT5 alone methylated both histone H4 and SmD3 proteins but PRMT5 complexed with p44 and pICln methylated SmD3 but not histone H4. These results imply a novel mechanism by which PRMT5 controls cell growth and contributes to prostate tumorigenesis.