Significance Small CAG (sCAG) RNAs are neurotoxic, but their role in polyglutamine degeneration remains to be fully elucidated. We observed that cellular expression of sCAGs is sufficient to induce neuronal DNA damage and discovered that the transcript level of NUDT16 was reduced in HD models. The NUDT16 protein has previously been linked to the DNA damage pathway. At the structural level, sCAGs form double-stranded CAG–CUG heteroduplex RNA with NUDT16 transcript which led to its gene silencing. We showed that the bisamidinium-based compound DB213 specifically interacts with duplex CAG RNA; consequently, both NUDT16 expression and DNA damage were rescued in HD mice. Our findings describe a pathogenic pathway that induces DNA damage in polyglutamine degeneration and demonstrate its therapeutic potential.