The study of animal models for myotonic dystrophy type 1 (DM1) has helped us to ‘de- and reconstruct’ our ideas on how the highly variable multisystemic constellation of disease features can be caused by only one type of event, i.e., the expansion of a perfect (CTG)n repeat in the DM1 locus on 19q. Evidence is now accumulating that cell type, cell state and species dependent activities of the DNA replication/repair/recombination machinery contribute to the intergenerational and somatic behavior of the (CTG)n repeat at the DNA level. At the RNA level, a gain-of-function mechanism, with dominant toxic effects of (CUG)n repeat containing transcripts, probably has a central role in DM1 pathology. Parallel study of DM2, a closely related form of myotonic dystrophy, has revealed a similar mechanism, but also made clear that part of the attention should remain focused on a possible role for candidate loss-of-function genes from the DM1 locus itself (like DMWD, DMPK and SIX5) or elsewhere in the genome, to find explanations for clinical aspects that are unique to DM1. This review will focus on new insight regarding structure-function features of candidate genes involved in DM1 pathobiology, and on the mechanisms of expansion and disease pathology that have now partly been disclosed with the help of transgenic animal models.