Arginine methylation is a common post-translational modification that plays a role in many cellular processes through mediation of protein-protein interactions. There is still a dearth of structural information as to its role in mediating such interactions, but the available data suggest a possible role of cation-pi interactions in the recognition of methylated arginine. Hence, the effect of arginine methylation on its interaction with tryptophan has been investigated within the context of a beta-hairpin peptide. Arginine methylation was found to enhance the stacking interaction between the cationic guanidinium functionality of arginine and the indole ring of tryptophan, resulting in structural stabilization of the hairpin. Thermodynamic analysis reveals more favorable entropy of hairpin folding with arginine methylation, a more negative change in heat capacity for folding, and a modest decrease in enthalpic driving force. This is consistent with enhanced stacking and hydrophobic interactions through increased surface area of the guanidinium moiety and greater delocalization of positive charge. In addition, these peptides exhibit significant cold denaturation, which can be accounted for by the inclusion of an expression of temperature-dependent Delta C-p in the thermodynamic analysis.