The polarizable embedding (PE) approach is a flexible embedding model where a preselected region out of a larger system is described quantum mechanically, while the interaction with the surrounding environment is modeled through an effective operator. This effective operator represents the environment by atom-centered multipoles and polarizabilities derived from quantum mechanical calculations on (fragments of) the environment. Thereby, the polarization of the environment is explicitly accounted for. Here, we present the coupling of the PE approach with the density matrix renormalization group (DMRG). This PE-DMRG method is particularly suitable for embedded subsystems that feature a dense manifold of frontier orbitals which requires large active spaces. Recovering such static electron-correlation effects in multiconfigurational electronic structure problems, while accounting for both electrostatics and polarization of a surrounding environment, allows us to describe strongly correlated electronic structures in complex molecular environments. We investigate various embedding potentials for the well-studied first excited state of water with active spaces that correspond to a full configuration-interaction treatment. Moreover, we study the environment effect on the first excited state of a retinylidene Schiff base within a channelrhodopsin protein. For this system, we also investigate the effect of dynamical correlation included through short-range density functional theory.