Genomic expansions of simple tandem repeats can give rise to toxic RNAs that contain expanded repeats. In myotonic dystrophy, the expression of expanded CUG repeats (CUG^exp) causes abnormal regulation of alternative splicing and neuromuscular dysfunction. We used a transgenic mouse model to show that derangements of myotonic dystrophy are reversed by a morpholino antisense oligonucleotide, CAG25, that binds to CUG^exp RNA and blocks its interaction with muscleblind-like 1 (MBNL1), a CUG^exp-binding protein. CAG25 disperses nuclear foci of CUG^exp RNA and reduces the overall burden of this toxic RNA. As MBNL1 is released from sequestration, the defect of alternative splicing regulation is corrected, thereby restoring ion channel function. These findings suggest an alternative use of antisense methods, to inhibit deleterious interactions of proteins with pathogenic RNAs.