Protein arginine methyltransferase 3 (PRMT3) regulates protein functions by introducing asymmetric dimethylation marks at the arginine residues in proteins. However, very little is known about the interaction partners of PRMT3 and their functional outcomes. Using yeast-two hybrid screening, we identified Retinal dehydrogenase 1 (ALDH1A1) as a potential interaction partner of PRMT3 and confirmed this interaction using different methods. ALDH1A1 regulates variety of cellular processes by catalyzing the conversion of retinaldehyde to retinoic acid. By molecular docking and site-directed mutagenesis, we identified the specific residues in the catalytic domain of PRMT3 that facilitate interaction with the C-terminal region of ALDH1A1. PRMT3 inhibits the enzymatic activity of ALDH1A1 and negatively regulates the expression of retinoic acid responsive genes in a methyltransferase activity independent manner. Our findings show that in addition to regulating protein functions by introducing methylation modifications, PRMT3 could also regulate global gene expression through protein-protein interactions.