Protein arginine methyltransferases (PRMTs) regulate diverse biological processes and are increasingly being recognized for their potential as drug targets. Here we report the discovery of a potent, selective and cell active chemical probe for PRMT7. SGC3027 is a cell permeable prodrug, which in cells, is converted to SGC8158, a potent, SAM-competitive PRMT7 inhibitor. Inhibition or knockout of cellular PRMT7 resulted in drastically reduced levels of arginine monomethylation of HSP70 family members and other stress-associated proteins. Structural and biochemical analysis revealed that PRMT7-driven in vitro methylation of HSP70 at R469 requires an ATP-bound, open conformation of HSP70. In cells, SGC3027 inhibited methylation of both constitutive and inducible forms of HSP70, and led to decreased tolerance for perturbations of proteostasis including heat shock and proteasome inhibitors. These results demonstrate a role for PRMT7 and arginine methylation in stress response.