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Myotonic dystrophy type 1 (DM1) is caused by an expansion of CTG repeats in the 3' untranslated region (UTR) of the dystrophia myotonia protein kinase (DMPK) gene. Cognitive impairment associated with structural change in the brain is prevalent in DM1. How this histopathological abnormality during disease progression develops remains elusive. Nuclear accumulation of mutant DMPK mRNA containing expanded CUG RNA disrupting the cytoplasmic and nuclear activities of muscleblind-like (MBNL) protein has been implicated in DM1 neural pathogenesis. The association between MBNL dysfunction and morphological changes has not been investigated. We generated a mouse model for postnatal expression of expanded CUG RNA in the brain that recapitulates the features of the DM1 brain, including the formation of nuclear RNA and MBNL foci, learning disability, brain atrophy and misregulated alternative splicing. Characterization of the pathological abnormalities by a time-course study revealed that hippocampus-related learning and synaptic potentiation were impaired before structural changes in the brain, followed by brain atrophy associated with progressive reduction of axon and dendrite integrity. Moreover, cytoplasmic MBNL1 distribution on dendrites decreased before dendrite degeneration, whereas reduced MBNL2 expression and altered MBNL-regulated alternative splicing was evident after degeneration. These results suggest that the expression of expanded CUG RNA in the DM1 brain results in neurodegenerative processes, with reduced cytoplasmic MBNL1 as an early event response to expanded CUG RNA.