The coactivator associated arginine methyltransferase (CARM1) promotes transcription, as its name implies. It does so by modifying histones and chromatin bound proteins. We identified nuclear factor I B (NFIB) as a CARM1 substrate and show that this transcription factor utilizes CARM1 as a coactivator. Biochemical studies reveal that tripartite motif 29 (TRIM29) is an effector molecule for methylated NFIB. Importantly, NFIB harbors both oncogenic and metastatic activities, and is often overexpressed in small cell lung cancer (SCLC). Here, we explore the possibility that CARM1 methylation of NFIB is important for its transforming activity. Using a SCLC mouse model, we show that both CARM1 and the CARM1 methylation site on NFIB are critical for the rapid onset of SCLC. Furthermore, CARM1 and methylated NFIB are responsible for maintaining similar open chromatin states in tumors. Together, these findings suggest that CARM1 might be a therapeutic target for SCLC.