Myotonic dystrophy is an RNA gain-of-function disease caused by expanded CUG or CCUG repeats, which sequester the RNA binding protein MBNL1. Here we describe a newly discovered function for MBNL1 as a regulator of pre-miR-1 biogenesis and find that miR-1 processing is altered in heart samples from people with myotonic dystrophy. MBNL1 binds to a UGC motif located within the loop of pre-miR-1 and competes for the binding of LIN28, which promotes pre-miR-1 uridylation by ZCCHC11 (TUT4) and blocks Dicer processing. As a consequence of miR-1 loss, expression of GJA1 (connexin 43) and CACNA1C (Cav1.2), which are targets of miR-1, is increased in both DM1- and DM2-affected hearts. CACNA1C and GJA1 encode the main calcium- and gap-junction channels in heart, respectively, and we propose that their misregulation may contribute to the cardiac dysfunctions observed in affected persons.