Heat-shock protein of 47 kDa (Hsp47) is a molecular chaperone that recognizes collagen triple helices in the endoplasmic reticulum (ER). Hsp47-knockout mouse embryos are deficient in the maturation of collagen types I and IV, and collagen triple helices formed in the absence of Hsp47 show increased susceptibility to protease digestion. We show here that the fibrils of type I collagen produced by Hsp47-/- cells are abnormally thin and frequently branched. Type I collagen was highly accumulated in the ER of Hsp47-/- cells, and its secretion rate was much slower than that of Hsp47+/+ cells, leading to accumulation of the insoluble aggregate of type I collagen within the cells. Transient expression of Hsp47 in the Hsp47-/- cells restored normal extracellular fibril formation and intracellular localization of type I collagen. Intriguingly, type I collagen with unprocessed N-terminal propeptide (N-propeptide) was secreted from Hsp47-/- cells and accumulated in the extracellular matrix. These results indicate that Hsp47 is required for correct folding and prevention of aggregation of type I collagen in the ER and that this function is indispensable for efficient secretion, processing, and fibril formation of collagen.