KH-type splicing regulatory protein (KSRP) is closely related to chick zipcode-binding protein 2 and rat MARTA1, which are involved in neuronal transport and localization of β-actin and microtubule-associated protein 2 mRNAs, respectively. KSRP is a multifunctional RNA-binding protein that has been implicated in transcriptional regulation, neuro-specific alternative splicing and mRNA decay. More specifically, KSRP is an essential factor for targeting AU-rich element-containing mRNAs to the exosome. We report here that KSRP is arginine methylated and interacts with the Tudor domain of SMN, the causative gene for spinal muscular atrophy (SMA), in a CARM1 methylation-dependent fashion. These two proteins colocalize in granule-like foci in the neurites of differentiating neuronal cells and the CARM1 methyltransferase is required for normal localization of KSRP in neuronal cells. Strikingly, this interaction is abrogated by naturally-occurring Tudor domain mutations found in human patients affected with severe Type I SMA, a strong indication of its functional significance to the etiology of the disease. We also report for the first time that Q136E and I116F Tudor mutations behave similarly to the previously characterized E134K mutation, and cause loss of Tudor interactions with several cellular methylated proteins. Finally, we show that KSRP is misregulated in the absence of SMN, and this correlated with increased mRNA stability of its mRNA target, p21 ^cip1/waf1 , in spinal cord of mild SMA model mice. Our results suggest SMN can act as a molecular chaperone for methylated proteins involved in RNA metabolism and provide new insights into the pathophysiology of SMA.