CUG-BP is a human nuclear and cytoplasmic RNA-binding protein. A role in the control of alternative splicing has been reported, but to date no cytoplasmic function for this protein has been demonstrated. A close sequence homolog of CUG-BP is EDEN-BP that is required for the specific cytoplasmic poly(A) tail shortening of certain mRNAs after fertilization of Xenopus eggs. Here, we show that human CUG-BP and Xenopus EDEN-BP have very similar RNA-binding specificities. In addition, we use a deadenylation assay to show that CUG-BP is able to act as a deadenylation factor. In contrast, a mutant form of CUG-BP, though still able to bind to RNA with a specificity similar to that of wild-type CUG-BP, does not act as a deadenylation factor. It is suggested that the CUG expansion associated with Type 1 myotonic dystrophy can affect the function or the activity of CUG-BP, leading to a trans-dominant effect on normal RNA processing. The results presented here identify CUG-BP-dependent deadenylation as a potential cytoplasmic target for this trans-dominant effect.