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ABSTRACT Proper deposition of the extracellular matrix and its major components, the collagens, is essential for endochondral ossification and bone mass accrual. Collagen prolyl 4‐hydroxylases (C‐P4Hs) hydroxylate proline residues in the ‐X‐Pro‐Gly‐ repeats of all known collagen types. Their product, 4‐hydroxyproline, is essential for correct folding and thermal stability of the triple‐helical collagen molecules in physiological body temperatures. We have previously shown that inactivation of the mouse P4ha1 gene, which codes for the catalytic α subunit of the major C‐P4H isoform, is embryonic lethal, whereas inactivation of the P4ha2 gene produced only a minor phenotype. Instead, mice with a haploinsufficiency of the P4ha1 gene combined with a homozygous deletion of the P4ha2 gene present with a moderate chondrodysplasia due to transient cell death of the growth plate chondrocytes. Here, to further characterize the bone phenotype of the P4ha1+/−; P4ha2−/− mice, we have carried out gene expression analyses at whole‐tissue and single‐cell levels, biochemical analyses, microcomputed tomography, histomorphometric analyses, and second harmonic generation microscopy to show that C‐P4H α subunit expression peaks early and that the C‐P4H deficiency leads to reduced collagen amount, a reduced rate of bone formation, and a loss of trabecular and cortical bone volume in the long bones. The total osteoblast number in the proximal P4ha1+/−; P4ha2−/− tibia and the C‐P4H activity in primary P4ha1+/−; P4ha2−/− osteoblasts were reduced, whereas the population of osteoprogenitor colony‐forming unit fibroblasts was increased in the P4ha1+/−; P4ha2−/− marrow. Thus, the P4ha1+/−; P4ha2−/− mouse model recapitulates key aspects of a recently recognized congenital connective tissue disorder with short stature and bone dysplasia caused by biallelic variants of the human P4HA1 gene. Altogether, the data demonstrate the allele dose‐dependent importance of the C‐P4Hs to the developing organism and a threshold effect of C‐P4H activity in the proper production of bone matrix. © 2022 The Authors. JBMR Plus published by Wiley Periodicals LLC on behalf of American Society for Bone and Mineral Research.