Myotonic dystrophy type 1 (DM1) is a genetic disease caused by the pathological expansion of a CTG trinucleotide repeat in the 3' UTR of the DMPK gene. In the DMPK transcripts, the CUG expansions sequester RNA-binding proteins into nuclear foci, including transcription factors and alternative splicing regulators such as MBNL1. MBNL1 sequestration has been associated with key features of DM1. However, the basis behind a number of molecular and histological alterations in DM1 remain unclear. To help identify new pathogenic components of the disease, we carried out a genetic screen using a Drosophila model of DM1 that expresses 480 interrupted CTG repeats, i(CTG)480, and a collection of 1215 transgenic RNA interference (RNAi) fly lines. Of the 34 modifiers identified, two RNA-binding proteins, TBPH (homolog of human TAR DNA-binding protein 43 or TDP-43) and BSF (Bicoid stability factor; homolog of human LRPPRC), were of particular interest. These factors modified i(CTG)480 phenotypes in the fly eye and wing, and TBPH silencing also suppressed CTG-induced defects in the flight muscles. In Drosophila flight muscle, TBPH, BSF and the fly ortholog of MBNL1, Muscleblind (Mbl), were detected in sarcomeric bands. Expression of i(CTG)480 resulted in changes in the sarcomeric patterns of these proteins, which could be restored by coexpression with human MBNL1. Epistasis studies showed that Mbl silencing was sufficient to induce a subcellular redistribution of TBPH and BSF proteins in the muscle, which mimicked the effect of i(CTG)480 expression. These results provide the first description of TBPH and BSF as targets of Mbl-mediated CTG toxicity, and they suggest an important role of these proteins in DM1 muscle pathology.