Myotonic dystrophy type 1 (DM1) is caused by expansion of a CTG repeat in the DMPK gene. In skeletal muscles, DM1 may involve a novel, RNA-dominant disease mechanism in which transcripts from the mutant DMPK allele accumulate in the nucleus and compromise the regulation of alternative splicing. Here we show evidence for a similar disease mechanism in brain. Examination of post-mortem DM1 tissue by fluorescence in situ hybridization indicates that the mutant DMPK mRNA, with its expanded CUG repeat in the 3'-untranslated region, is widely expressed in cortical and subcortical neurons. The mutant transcripts accumulate in discrete foci within neuronal nuclei. Proteins in the muscleblind family are recruited into the RNA foci and depleted elsewhere in the nucleoplasm. In parallel, a subset of neuronal pre-mRNAs show abnormal regulation of alternative splicing. These observations suggest that CNS impairment in DM1 may result from a deleterious gain-of-function by mutant DMPK mRNA.