Lysyl hydroxylase 2 (LH2) is an enzyme that catalyzes the hydroxylation of lysine (Lys) residues in fibrillar collagen telopeptides, a critical post-translational modification for the stability of intermolecular cross-links. Though abnormal LH2 activities have been implicated in various diseases including Bruck syndrome, the molecular basis of the pathologies is still not well understood. Since LH2 null mice die at early embryonic stage, we generated LH2 heterozygous (LH2^+/−) mice in which LH2 level is significantly diminished, and characterized collagen and bone phenotypes using femurs. Compared to the wild-type (WT), LH2^+/− collagen showed a significant decrease in the ratio of hydroxylysine (Hyl)- to the Lys-aldehyde-derived collagen cross-links without affecting the total number of aldehydes involved in cross-links. Mass spectrometric analysis revealed that, in LH2^+/− type I collagen, the extent of hydroxylation of all telopeptidyl Lys residues was significantly decreased. In the helical domain, Lys hydroxylation at the cross-linking sites was either unaffected or slightly lower, but other sites were significantly diminished compared to WT. In LH2^+/− femurs, mineral densities of cortical and cancellous bones were significantly decreased and the mechanical properties of cortical bones evaluated by nanoindentation analysis were compromised. When cultured, LH2^+/− osteoblasts poorly produced mineralized nodules compared to WT osteoblasts. These data provide insight into the functionality of LH2 in collagen molecular phenotype and its critical role in bone matrix mineralization and mechanical properties.