Prolyl 4-hydroxylation, the most important post-translational modification in collagen biosynthesis, is catalyzed by prolyl 4-hydroxylase, an endoplasmic reticulum-resident enzyme. HSP47 is a collagen-binding stress protein which also resides in the endoplasmic reticulum (Nagata, K. and Yamada, K.M. (1986) J. Biol. Chem., 261, 7531-7536). Both prolyl 4-hydroxylase and HSP47 interact with procollagen alpha-chains during their folding and/or modification in the endoplasmic reticulum. Recent study has revealed that a simple collagen model peptide, (Pro-Pro-Gly)n, is recognized by HSP47 as well as by prolyl 4-hydroxylase in vitro (Koide et al., manuscript submitted). In the present study, we investigated the effect of HSP47 on the prolyl 4-hydroxylation of such collagen model peptides. To monitor the enzymatic hydroxylation of the peptides, we developed a non-RI assay system based on reversed-phase HPLC. When HSP47 was added to the reaction mixture, substrate and less-hydroxylated materials accumulated. This effect depended on the peptide-binding activity of HSP47, because a mutant HSP47 without collagen-binding activity did not show any inhibitory effect on prolyl 4-hydroxylation. Kinetic analysis and other biochemical analyses suggest that HSP47 retards the enzymatic reaction competing for the substrate peptide.