Prolyl 3-hydroxylase 1 (P3H1), encoded by the LEPRE1 gene, forms a molecular complex with cartilage-associated protein (CRTAP) and cyclophilin B (encoded by PPIB) in the endoplasmic reticulum (ER). This complex is responsible for one step in collagen post-translational modification, the prolyl 3-hydroxylation of specific proline residues, specifically α1(I) Pro986. P3H1 provides the enzymatic activity of the complex and has a Lys-Asp-Glu-Leu (KDEL) ER-retrieval sequence at the carboxyl terminus. Loss of function mutations in LEPRE1 lead to the Pro986 residue remaining unmodified and lead to slow folding and excessive helical post-translational modification of type I collagen, which is seen in both dominant and recessive osteogenesis imperfecta (OI). Here, we present the case of siblings with non-lethal OI due to novel compound heterozygous mutations in LEPRE1 (c.484delG and c.2155dupC). The results of RNA analysis and real-time PCR suggest that mRNA with c.2155dupC escapes from nonsense-mediated RNA decay. Without the KDEL ER- retrieval sequence, the product of the c.2155dupC variant cannot be retained in the ER. This is the first report of a mutation in LEPRE1 that eliminates only the KDEL ER-retrieval sequence, whereas other functional domains remain intact. Our study shows, for the first time, that the KDEL ER- retrieval sequence is essential for P3H1 functionality and that a defect in KDEL is sufficient for disease onset.