Collagen is a major component of the extracellular matrix and its integrity is essential for connective tissue and organ function. The importance of proteins involved in intracellular collagen post-translational modification, folding and transport was recently highlighted from studies on recessive forms of osteogenesis imperfecta (OI). Here we describe the critical role of SC65 (Synaptonemal Complex 65, P3H4), a leprecan-family member, as part of an endoplasmic reticulum (ER) complex with prolyl 3-hydroxylase 3. This complex affects the activity of lysyl-hydroxylase 1 potentially through interactions with the enzyme and/or cyclophilin B. Loss of Sc65 in the mouse results in instability of this complex, altered collagen lysine hydroxylation and cross-linking leading to connective tissue defects that include low bone mass and skin fragility. This is the first indication of a prolyl-hydroxylase complex in the ER controlling lysyl-hydroxylase activity during collagen synthesis.