Monilethrix is a rare condition characterized by a hair shaft anomaly known as beaded hair. It can show either an autosomal dominant or an autosomal recessive inheritance pattern. The autosomal dominant form of monilethrix is caused by mutations in the basic hair keratin genes KRT81, KRT83 or KRT86, while the autosomal recessive form results from mutations in the desmoglein 4 (DSG4) gene. We define the molecular basis of monilethrix in a Japanese patient who has had sparse and fragile scalp hairs since birth. We performed mutation analysis of candidate genes. In addition, we performed co-immunoprecipitation assays and immunofluorescence studies in cultured cells to investigate the functional consequences caused by a mutation. Mutation analysis resulted in the identification of novel compound heterozygous mutations, c.624delG (p.M208IfsX4) and c.2468G>A (p.W823X), in the DSG4 gene of the patient. Furthermore, we show that the mutant DSG4 protein with the mutation p.W823X severely affects the affinity to plakoglobin protein, which may contribute to disruption of desmosomes in the patient's hair shaft. Our results further underscore the crucial role of the DSG4 gene in differentiation of the hair shaft in humans.