Myotonic dystrophy type 1 (DM1) is a CTG microsatellite expansion (CTG exp ) disorder caused by expression of CUG exp RNAs. These mutant RNAs alter the activities of RNA processing factors, including MBNL proteins, leading to re-expression of fetal isoforms in adult tissues and DM1 pathology. While this pathogenesis model accounts for adult-onset disease, the molecular basis of congenital DM (CDM) is unknown. Here, we test the hypothesis that disruption of developmentally regulated RNA alternative processing pathways contributes to CDM disease. We identify prominent alternative splicing and polyadenylation abnormalities in infant CDM muscle, and, although most are also misregulated in adult-onset DM1, dysregulation is significantly more severe in CDM. Furthermore, analysis of alternative splicing during human myogenesis reveals that CDM-relevant exons undergo prenatal RNA isoform transitions and are predicted to be disrupted by CUG exp -associated mechanisms in utero. To test this possibility and the contribution of MBNLs to CDM pathogenesis, we generated mouse Mbnl double (Mbnl1; Mbnl2) and triple (Mbnl1; Mbnl2; Mbnl3) muscle-specific knockout models that recapitulate the congenital myopathy, gene expression, and spliceopathy defects characteristic of CDM. This study demonstrates that RNA misprocessing is a major pathogenic factor in CDM and provides novel mouse models to further examine roles for cotranscriptional/post-transcriptional gene regulation during development.