Myotonic dystrophy type 1 (DM1) is caused by a CTG trinucleotide expansion in the 3' untranslated region of the DM protein kinase gene. People with DM1 have an unusual form of insulin resistance caused by a defect in skeletal muscle. Here we demonstrate that alternative splicing of the insulin receptor (IR) pre-mRNA is aberrantly regulated in DM1 skeletal muscle tissue, resulting in predominant expression of the lower-signaling nonmuscle isoform (IR-A). IR-A also predominates in DM1 skeletal muscle cultures, which exhibit a decreased metabolic response to insulin relative to cultures from normal controls. Steady-state levels of CUG-BP, a regulator of pre-mRNA splicing proposed to mediate some aspects of DM1 pathogenesis, are increased in DM1 skeletal muscle; overexpression of CUG-BP in normal cells induces a switch to IR-A. The CUG-BP protein mediates this switch through an intronic element located upstream of the alternatively spliced exon 11, and specifically binds within this element in vitro. These results support a model in which increased expression of a splicing regulator contributes to insulin resistance in DM1 by affecting IR alternative splicing.