The generation and homeostasis of bone tissue throughout development and maturity is controlled by the carefully balanced processes of bone formation and resorption. Disruption of this balance can give rise to a broad range of skeletal pathologies. Lethal osteosclerotic bone dysplasia (or, Raine syndrome) is an autosomal recessive disorder characterized by generalized osteosclerosis with periosteal bone formation and a distinctive facial phenotype. Affected individuals survive only days or weeks. We have identified and defined a chromosome 7 uniparental isodisomy and a 7p telomeric microdeletion in an affected subject. The extent of the deleted region at the 7p telomere was established by genotyping microsatellite markers across the telomeric region. The region is delimited by marker D7S2563 and contains five transcriptional units. Sequence analysis of FAM20C, located within the deleted region, in six additional affected subjects revealed four homozygous mutations and two compound heterozygotes. The identified mutations include four nonsynonymous base changes, all affecting evolutionarily conserved residues, and four splice-site changes that are predicted to have a detrimental effect on splicing. FAM20C is a member of the FAM20 family of secreted proteins, and its mouse orthologue (DMP4) has demonstrated calcium-binding properties; we also show by in situ hybridization its expression profile in mineralizing tissues during development. This study defines the causative role of FAM20C in this lethal osteosclerotic disorder and its crucial role in normal bone development.