Tyrosyl-DNA phosphodiesterase (TDP1) hydrolyzes the phosphodiester bond between a DNA 3' end and a tyrosyl moiety and is implicated in the repair of trapped topoisomerase I (Top1)-DNA covalent complexes (Top1cc). Protein arginine methyltransferase 5 (PRMT5) catalyzes arginine methylation of TDP1 at the residues R361 and R586. Here, we establish mechanistic crosstalk between TDP1 arginine methylation and ubiquitylation, which is critical for TDP1 homeostasis and cellular responses to Top1 poisons. We show that R586 methylation promotes TDP1 ubiquitylation, which facilitates ubiquitin/proteasome-dependent TDP1 turnover by impeding the binding of UCHL3 (deubiquitylase enzyme) with TDP1. TDP1-R586 also promotes TDP1-XRCC1 binding and XRCC1 foci formation at Top1cc-damage sites. Intriguingly, R361 methylation enhances the 3'-phosphodiesterase activity of TDP1 in real-time fluorescence-based cleavage assays, and this was rationalized using structural modeling. Together, our findings establish arginine methylation as a co-regulator of TDP1 proteostasis and activity, which modulates the repair of trapped Top1cc.