Background Inbreeding and population bottlenecks in the ancestry of Friesian horses has led to health issues such as dwarfism. The limbs of dwarfs are short, ribs are dented, while the head looks adult-like at young age and the back appears as relatively normal. A striking feature of the condition is the flexor tendon laxity that leads to hyperextension of the fetlock joints. The growth plates of dwarfs display disorganized and thickened chondrocyte columns. The aim of this study was to identify the gene defect that causes the recessively inherited trait in Friesian horses thus to improve our understanding of the disease process and mechanisms behind also at the human molecular level (‘one health’). Results We have localized the genetic cause of the dwarfism phenotype by a genome wide approach to a 3 Mb region on the p-arm of equine chromosome 14. The DNA of four dwarfs and three control Friesian horse was sequenced completely and we identified the missense mutation ECA14:g.4535550C>T that cosegregated with the phenotype in all Friesians analyzed. The mutation leads to the amino acid substitution p.Arg17Lys of xylosylprotein beta 1,4-galactosyltransferase 7 encoded by B4GALT7. The protein is one of the enzymes that synthesize the tetrasaccharide linker between protein and glycosaminoglycan moieties of proteoglycans of the extracellular matrix. The mutation not only affects a conserved arginine codon but also the last nucleotide of the first exon of the gene. With that we showed that it impedes splicing of the primary transcript in cultured fibroblasts from a heterozygous horse. As a result, the level of B4GALT7 mRNA in fibroblasts from a dwarf is only 3% compared to normal levels. Mutations in B4GALT7 in humans are associated with Ehlers-Danlos syndrome progeroid type 1 and Larsen of Reunion Island syndrome. Growth retardation is a common manifestation in both of these syndromes. Conclusions We suggest that the identified mutation of equine B4GALT7 leads to the typical dwarfism phenotype in Friesian horses due to deficient splicing of transcripts of the gene. The mutated gene implicates the extracellular matrix in the regular organization of chrondrocyte columns of the growth plate. Conservation of individual amino acids may reflect underlying conservation of nucleotide sequence that are required for efficient splicing.