The common form of myotonic dystrophy (DM1) is associated with the expression of expanded CTG DNA repeats as RNA (CUG^exp RNA). To test whether CUG^exp RNA creates a global splicing defect, we compared the skeletal muscle of two mouse models of DM1, one expressing a CTG^exp transgene and another homozygous for a defective muscleblind 1 (Mbnl1) gene. Strong correlation in splicing changes for ∼100 new Mbnl1-regulated exons indicates that loss of Mbnl1 explains >80% of the splicing pathology due to CUG^exp RNA. In contrast, only about half of mRNA-level changes can be attributed to loss of Mbnl1, indicating that CUG^exp RNA has Mbnl1-independent effects, particularly on mRNAs for extracellular matrix proteins. We propose that CUG^exp RNA causes two separate effects: loss of Mbnl1 function (disrupting splicing) and loss of another function that disrupts extracellular matrix mRNA regulation, possibly mediated by Mbnl2. These findings reveal unanticipated similarities between DM1 and other muscular dystrophies.