SERPINE1 mRNA‐binding protein 1 (SERBP1) is an arginine‐methylated RNA‐binding protein whose modification affects protein interaction and intracellular localization. In the present study, we show that, under normal growth conditions without stress, SERBP1 interacts with arginine‐methylated and stress granule‐associated proteins such as heterogeneous nuclear ribonucleoprotein A1, fragile X mental retardation protein and fragile X mental retardation syndrome‐related protein 1 in an RNA‐dependent manner. We also show that, after arsenite treatment, a proportion of full‐length SERBP1 protein co‐localizes with the typical stress granule marker T‐cell intracellular antigen‐1 in the cytoplasmic stress granules. Truncated SERBP1 with an N–terminal, central RG or C–terminal deletion, or single‐domain segments comprising the N–terminal, central or C–terminal region, were recruited to stress granules upon arsenite treatment but with reduced efficiency. In addition, upon arsenite treatment, the localization of SERBP1 changed from a diffuse cytoplasmic localization to nuclear‐dominant (concentrated in the nucleolus) A similar distribution was observed when cells were treated with the methylation inhibitor adenosine periodate, and was also detected for N‐ or C–terminal domain deletions and all three single‐domain fragments even without stress induction. We further demonstrate that adenosine periodate treatment delays the association/dissociation of SERBP1 with stress granules. Hypomethylation retains SERBP1 in the nucleus/nucleolus regardless of arsenite treatment. Our study indicates that arginine methylation is correlated with recruitment of SERBP to stress granules and nucleoli and its retention therein. To our knowledge, this is the first report of an RNA‐binding protein that is shifted simultaneously to cytoplasmic stress granules and nucleoli, two ribonucleoprotein‐enriched subcellular compartments, upon stress.