DNA methyltransferase 1 (DNMT1) is an enzyme known for DNA methylation maintenance. Point mutations in its replication focus targeting sequence (RFTS) domain lead to late-onset neurodegeneration, such as autosomal dominant cerebellar ataxia-deafness and narcolepsy (ADCA-DN) disorder. Here, we demonstrated that DNMT1 has the capability to bind to mRNA transcripts and facilitate 5-methylcytosine (m⁵C) RNA methylation by recruiting NOP2/Sun RNA methyltransferase 2 (NSUN2). RNA m⁵C methylation, in turn, promotes RNA stability for those genes modulating mitochondrial function. When the DNMT1 RFTS domain is mutated in mice, it triggers aberrant DNMT1-RNA interaction and significantly elevated m⁵C RNA methylation and RNA stability for a portion of metabolic genes. Consequently, increased levels of metabolic RNA transcripts contribute to cumulative oxidative stress, mitochondrial dysfunction, and neurological symptoms. Collectively, our results reveal a dual role of DNMT1 in regulating both DNA and RNA methylation, which further modulates mitochondrial function, shedding light on the pathogenic mechanism of DNMT1 mutation-induced neurodegeneration.