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Polyglutamine (polyQ) diseases, including spinocerebellar ataxias and Huntington’s disease, are progressive neurodegenerative disorders caused by CAG triplet-repeat expansion in the coding regions of disease-associated genes. In this study, we found that neurotoxic small CAG (sCAG) RNA species, microscopic Ataxin-2 CAG RNA foci, and protein aggregates exist as independent entities in cells. Synaptic defects and neurite outgrowth abnormalities were observed in mutant Ataxin-2-expressing mouse primary cortical neurons. We examined the suppression effects of the CAG RNA-binding peptide beta-structured inhibitor for neurodegenerative diseases (BIND) in mutant Ataxin-2-expressing mouse primary cortical neurons and found that both impaired synaptic phenotypes and neurite outgrowth defects were rescued. We further demonstrated that BIND rescued cell death through inhibiting sCAG RNA production, Ataxin-2 CAG RNA foci formation, and mutant Ataxin-2 protein translation. Interestingly, when the expanded CAG repeats in the mutant Ataxin-2 transcript was interrupted with the alternative glutamine codon CAA, BIND’s inhibitory effect on mutant protein aggregation was lost. We previously demonstrated that BIND interacts physically and directly with expanded CAG RNA sequences. Our data provide evidence that the BIND peptide associates with transcribed mutant CAG RNA to inhibit the formation of toxic species, including sCAG RNA, RNA foci, and polyQ protein translation and aggregation.