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Myotonic dystrophy type 1 (DM1) is an RNA dominant disease in which mutant transcripts containing an expanded CUG repeat (CUGexp) cause muscle dysfunction by interfering with biogenesis of other mRNAs. The toxic effects of mutant RNA are mediated partly through sequestration of splicing regulator Muscleblind-like 1 (Mbnl1), a protein that binds to CUGexp RNA. A gene that is prominently affected encodes chloride channel 1 (Clcn1), resulting in hyperexcitability of muscle (myotonia). To identify DM1-affected genes and study mechanisms for dysregulation, we performed global mRNA profiling in transgenic mice that express CUGexp RNA, when compared with Mbnl1 knockout and Clcn1 null mice. We found that the majority of changes induced by CUGexp RNA in skeletal muscle can be explained by reduced activity of Mbnl1, including many changes that are secondary to myotonia. The pathway most affected comprises genes involved in calcium signaling and homeostasis. Some effects of CUGexp RNA on gene expression are caused by abnormal alternative splicing or downregulation of Mbnl1-interacting mRNAs. However, several of the most highly dysregulated genes showed altered transcription, as indicated by parallel changes of the corresponding pre-mRNAs. These results support the idea that trans-dominant effects of CUGexp RNA on gene expression in this transgenic model may occur at the level of transcription, RNA processing and mRNA decay, and are mediated mainly but not entirely through sequestration of Mbnl1.