Mental retardation is a main feature of the congenital form of myotonic dystrophy (DM1), however, the molecular mechanisms underlying the central nervous system symptoms of DM1 are poorly understood. We have established a PC12 cell line-based model expressing the DM1 expanded CUG repeats (CTG90 cells) to analyze the effects of this mutation on neuronal functions. Previously, we have reported that CTG90 cells displayed impaired NGF-induced neuronal differentiation. Because disruption of normal expression of the microtubule associated protein tau and neuronal aggregates of hyperphosphorylated tau have been associated with DM1, this study analyzes the behavior of tau in the CTG90 cells. Several alterations of tau were observed in the PC12 cells that express expanded CUG repeats, including a subtle but reproducible reduction in the expression of the tau mRNA splicing isoform containing exon 10, decreased expression of tau and hyperphosphorylation of both tau and high molecular weight tau as well as abnormal nuclear localization of tau phosphorylated at Ser396/404. Interestingly, phosphorylation regulates negatively the activity of tau as microtubule-associated protein. In addition, impaired activity of the Akt/GSK3beta pathway, which phosphorylates tau, was also identified in the CTG90 cells. Besides tau phosphorylation, the Akt/GSK3beta signaling pathway regulates other key processes of PC12 cells, such as apoptosis and neuronal differentiation. Our results indicate that defective neuronal differentiation exhibited by the PC12 cells expressing expanded CUG repeats could be the result of combinatory effects derived from the altered behavior of tau and the impaired activation of the Akt/GSK3beta signaling pathway.