The MBNL and CELF proteins act antagonistically to control the alternative splicing of specific exons during mammalian postnatal development. This process is dysregulated in myotonic dystrophy because MBNL proteins are sequestered by (CUG)n and (CCUG)n RNAs expressed from mutant DMPK and ZNF9 genes, respectively. While these observations predict that MBNL proteins have a higher affinity for these pathogenic RNAs versus their normal splicing targets, we demonstrate that MBNL1 possesses comparably high affinities for (CUG)n and (CAG)n RNAs as well as a splicing target, Tnnt3. Mapping of a MBNL1-binding site upstream of the Tnnt3 fetal exon indicates that a preferred binding site for this protein is a GC-rich RNA hairpin containing a pyrimidine mismatch. To investigate how pathogenic RNAs sequester MBNL1 in DM1 cells, we used a combination of chemical/enzymatic structure probing and electron microscopy to determine that MBNL1 forms a ring-like structure which binds to the dsCUG helix. While the MBNL1 N-terminal region is required for RNA binding, the C-terminal region mediates homotypic interactions which may stabilize intra- and/or inter-ring interactions. Our results provide a mechanistic basis for dsCUG-induced MBNL1 sequestration and highlight a striking similarity in the binding sites for MBNL proteins on splicing precursor and pathogenic RNAs.