The phenotypes in myotonic dystrophy types 1 and 2 (DM1 and DM2) are similar, suggesting a shared pathophysiologic mechanism. DM1 is caused by expansion of a CTG repeat in the DMPK gene. Pathogenic effects of this mutation are likely to be mediated, at least in part, by the expanded CUG repeat in mutant mRNA. The mutant transcripts are retained in the nucleus in multiple discrete foci. We investigated the possibility that DM2 is also caused by expansion of a CTG repeat or related sequence. Analysis of DNA by repeat expansion detection methods, and RNA by ribonuclease protection, did not show an expanded CTG or CUG repeat in DM2. However, hybridization of muscle sections with fluorescence-labeled CAG-repeat oligonucleotides showed nuclear foci in DM2 similar to those seen in DM1. Nuclear foci were present in all patients with symptomatic DM1 (n = 9) or DM2 (n = 9) but not in any disease controls or healthy subjects (n = 23). The foci were not seen with CUG- or GUC-repeat probes. Foci in DM2 were distinguished from DM1 by lower stability of the probe-target duplex, suggesting that a sequence related to the DM1 CUG expansion accumulates in the DM2 nucleus. Muscleblind proteins, which interact with expanded CUG repeats in vitro, localized to the nuclear foci in both DM1 and DM2. These results support the idea that nuclear accumulation of mutant RNA is pathogenic in DM1, suggest that a similar disease process occurs in DM2, and point to a role for muscleblind in the pathogenesis of both disorders.