Woolly hair (WH) is characterized by the presence of fine and tightly curled hair. WH can appear as a symptom of some systemic diseases, or without associated findings (nonsyndromic WH). Nonsyndromic WH is known to be inherited as either an autosomal-dominant (OMIM 194300) or recessive (ARWH; OMIM 278150) trait. In this study, we identified 11 consanguineous families of Pakistani origin with ARWH, as well as associated features including sparse and hypopigmented hair shafts. We first checked for mutations in the P2RY5 gene, which encodes an orphan G-protein-coupled receptor that we recently identified as a cause of ARWH. However, none of the 11 families had mutations in the P2RY5 gene. To identify the disease locus, we performed linkage studies in one of these families using the Affymetrix 10K array, and identified a region of suggestive linkage on chromosome 3q27. This region contains the lipase H (LIPH) gene which has been recently shown to underlie an autosomal-recessive form of hypotrichosis. Mutation analysis resulted in the identification of a total of 5 pathogenic mutations in the LIPH of all 11 families analyzed. These results show that LIPH is a second causative gene for ARWH/hypotrichosis, giving rise to a phenotype clinically indistinguishable from P2RY5 mutations.