Sm proteins constitute the common core of spliceosomal small nuclear ribonucleoproteins. Although Sm proteins are known to be methylated at specific arginine residues within the C-terminal arginine-glycine dipeptide (RG) repeats, the biological relevance of these modifications remains unknown. In this study, a tissue-specific function of arginine methylation of the SmB protein was identified in Drosophila. Analysis of the distribution of SmB during oogenesis revealed that this protein accumulates at the posterior pole of the oocyte, a cytoplasmic region containing the polar granules, which are necessary for the formation of primordial germ cells. The pole plasm localisation of SmB requires the methylation of arginine residues in its RG repeats by the Capsuléen-Valois methylosome complex. Functional studies showed that the methylation of these arginine residues is essential for distinct processes of the germline life cycle, including germ cell formation, migration and differentiation. In particular, the methylation of a subset of these arginine residues appears essential for the anchoring of the polar granules at the posterior cortex of the oocyte, whereas the methylation of another subset controls germ cell migration during embryogenesis. These results demonstrate a crucial role of arginine methylation in directing the subcellular localisation of SmB and that this modification contributes specifically to the establishment and development of germ cells.