Dystrophia myotonica type 1 (DM1) is an autosomal dominant multisystem disorder. The pathogenesis of central nervous system (CNS) involvement is poorly understood. Disease-specific induced pluripotent stem cell (iPSC) lines would provide an alternative model. In this study, we generated two DM1 lines and a normal iPSC line from dermal fibroblasts by retroviral transduction of Yamanaka's four factors (hOct4, hSox2, hKlf4, and hc-Myc). Both DM1 and control iPSC clones showed typical human embryonic stem cell (hESC) growth patterns with a high nuclear-to-cytoplasm ratio. The iPSC colonies maintained the same growth pattern through subsequent passages. All iPSC lines expressed stem cell markers and differentiated into cells derived from three embryonic germ layers. All iPSC lines underwent normal neural differentiation. Intranuclear RNA foci, a hallmark of DM1, were detected in DM1 iPSCs, neural stem cells (NSCs), and terminally differentiated neurons and astrocytes. In conclusion, we have successfully established disease-specific human DM1 iPSC lines, NSCs, and neuronal lineages with pathognomonic intranuclear RNA foci, which offer an unlimited cell resource for CNS mechanistic studies and a translational platform for therapeutic development.