The RBP associated with lethal yellow mutation (RALY) is a member of the heterogeneous nuclear ribonucleoprotein family whose transcriptome and interactome have been recently characterized. RALY binds poly-U rich elements within several RNAs and regulates the expression as well as the stability of specific transcripts. Here we show that RALY binds PRMT1 mRNA and regulates its expression. PRMT1 catalyzes the arginine methylation of Fused in Sarcoma (FUS), an RNA-binding protein that interacts with RALY. We demonstrate that RALY down-regulation decreases protein arginine N-methyltransferase 1 levels, thus reducing FUS methylation. It is known that mutations in the FUS nuclear localization signal (NLS) retain the protein to the cytosol, promote aggregate formation, and are associated with amyotrophic lateral sclerosis. Confirming that inhibiting FUS methylation increases its nuclear import, we report that RALY knockout enhances FUS NLS mutants’ nuclear translocation, hence decreasing aggregate formation. Furthermore, we characterize the RNA-dependent interaction of RALY with FUS in motor neurons. We show that mutations in FUS NLS as well as in RALY NLS reciprocally alter their localization and interaction with target mRNAs. These data indicate that RALY’s activity is impaired in FUS pathology models, raising the possibility that RALY might modulate disease onset and/or progression.