Myotonic dystrophy type 1 (DM1) is a neuromuscular disorder, characterised by cognitive and behavioural impairment, in addition to the typical muscle pathology. Imaging studies revealed widespread white matter lesions in DM1 patients, which may be partially explained by local demyelination. DM1 is caused by the abnormal expansion of non-coding CTG trinucleotide repeat, which is transcribed into toxic CUG RNA that accumulates in nuclear RNA foci and disrupts critical RNA-binding proteins. To investigate the impact of RNA toxicity on myelin biology, we used a transgenic mouse model of DM1, known as the DMSXL mice, which express expanded CUG transcripts in multiple tissues and cell types. We found delayed axon myelination of the corpus callosum at two weeks of age, which later recovered at four months. Early myelin defects were linked to an overall reduction in the number of oligodendroglia cells, specifically myelinating oligodendrocytes (OL), with a concurrent increase in oligodendrocyte progenitor cells (OPC). These phenotypes were accompanied by abundant RNA foci and splicing dysregulation in oligodendroglia, which were more pronounced at two weeks. Taking advantage of primary cell models, we investigated the mechanisms triggered by toxic CUG RNA in oligodendroglia. OPC isolated from DMSXL newborns exhibited impaired differentiation into fully ramified OLs in culture, a defect we confirmed in human oligodendroglia derived from DM1 patients. RNA sequencing revealed expression and splicing changes in DMSXL OL that affect transcripts related to the cytoskeleton and cell differentiation. Importantly, the transcriptomic defects of DMSXL OL recreated expression and splicing profiles typical of immature OPC. In conclusion, toxic CUG RNA disrupts the molecular program of oligodendroglia differentiation, impairing the transcriptome changes occurring during the OPC-OL transition and leading to transient hypomyelination in mice.