Although the physiologic significance of lysine methylation of histones is well known, whether lysine methylation plays a role in the regulation of nonhistone proteins has not yet been examined. The histone lysine methyltransferase SETD8 is overexpressed in various types of cancer and seems to play a crucial role in S-phase progression. Here, we show that SETD8 regulates the function of proliferating cell nuclear antigen (PCNA) protein through lysine methylation. We found that SETD8 methylated PCNA on lysine 248, and either depletion of SETD8 or substitution of lysine 248 destabilized PCNA expression. Mechanistically, lysine methylation significantly enhanced the interaction between PCNA and the flap endonuclease FEN1. Loss of PCNA methylation retarded the maturation of Okazaki fragments, slowed DNA replication, and induced DNA damage, and cells expressing a methylation-inactive PCNA mutant were more susceptible to DNA damage. An increase of methylated PCNA was found in cancer cells, and the expression levels of SETD8 and PCNA were correlated in cancer tissue samples. Together, our findings reveal a function for lysine methylation on a nonhistone protein and suggest that aberrant lysine methylation of PCNA may play a role in human carcinogenesis. Cancer Res; 72(13); 3217–27. ©2012 AACR.