Myotonic dystrophy type 1 (DM1) is a multisystemic condition that affects many tissues, as well as age groups. Compelling clinical evidence clearly demonstrates the impairment of the central nervous system (CNS), through cognitive/attention deficits, executive dysfunction, prevalent hypersomnia, behavioral changes and intellectual disability in the most severe cases. The neurological manifestations are highly debilitating and distressing for patients and their relatives, and there is no cure for this devastating condition. DM1 is caused by the abnormal expansion of a non-coding trinucleotide CTG repeats. Expanded CUG transcripts accumulate in toxic RNA aggregates or foci in the cell nucleus, perturbing the activity of key RNA-binding proteins and deregulating the splicing and general RNA metabolism of downstream targets. However, important gaps exist in our understanding of the disease mechanisms in the brain. In particular, we do not know the cell types primarily affected or the molecular pathways mostly dysregulated by the repeat expansion in the CNS. Using a transgenic mouse model of DM1 we found preferential accumulation of toxic RNA foci and missplicing in cortical astrocytes relative to neurons, pointing to glia pathology. We then used our DM1 mice as a source of primary neurons and astrocytes to resolve cell type-specific phenotypes and their associated molecular abnormalities. DM1 primary astrocytes show greater RNA foci accumulation and missplicing, relative to neurons, in association with defective cell growth, adhesion, cell spreading, polarization and migration. In contrast, the growth profile of DM1 primary neurons remained unaltered, but late neurite arborization was significantly impaired. Interestingly, defects in neuritogenesis were aggravated by the presence of DM1 mouse astrocytes in co-culture systems. To dissect the molecular mechanisms behind astrocyte dysfunction we performed global proteomics and transcriptomics approaches on homogenous astrocyte cultures. In line with the cell phenotypes described, we found relevant splicing and expression changes in critical regulators of cytoskeletal dynamics and cell adhesion. In conclusion, the DM1 repeat expansion has a deleterious impact on glia cell biology, which may in turn affect neuronal physiology through defective glial-neuronal crosstalk. Our results provide new insight into the cellular and molecular mechanisms of DM1 brain disease.