In myotonic dystrophy (DM), expression of RNA containing expanded CUG or CCUG repeats leads to misregulated alternative splicing of pre-mRNA. The repeat-bearing transcripts accumulate in nuclear foci, together with proteins in the muscleblind family, MBNL1 and MBNL2. In transgenic mice that express expanded CUG repeats, we show that the splicing defect selectively targets a group of exons that share a common temporal pattern of developmental regulation. These exons undergo a synchronized splicing switch between post-natal day 2 and 20 in wild-type mice. During this post-natal interval, MBNL1 protein translocates from a predominantly cytoplasmic to nuclear distribution. In the absence of MBNL1, these physiological splicing transitions do not occur. The splicing defect induced by expanded CUG repeats in mature muscle fibers is closely reproduced by deficiency of MBNL1 but not by deficiency of MBNL2. A parallel situation exists in human DM type 1 and type 2. MBNL1 is depleted from the muscle nucleoplasm because of sequestration in nuclear foci, and the associated splicing defects are remarkably similar to those observed in MBNL1 knockout mice. These results indicate that MBNL1 participates in the post-natal remodeling of skeletal muscle by controlling a key set of developmentally regulated splicing switches. Sequestration of MBNL1, and failure to maintain these splicing transitions, has a pivotal role in the pathogenesis of muscle disease in DM.