Mutations, mostly in the region of the COL10A1 gene encoding the C-terminal non-collagenous domain, cause the dwarfism metaphyseal chondrodysplasia type Schmid (MCDS). In most cases, the disease mechanism involves the misfolding of the mutant protein causing increased endoplasmic reticulum (ER) stress and an unfolded protein response (UPR). However, in an iliac crest biopsy, the COL10A1 p.Y632X mutation was found to produce instability of the mutant mRNA such that little mutant protein may be produced. To investigate the disease mechanism further, a gene-targeted mouse model of the Col10a1 p.Y632X mutation was generated. In this model, the mutant mRNA showed no instability, and in mice heterozygous for the mutation, mutant and wild-type mRNAs were present at equal concentrations. The protein was translated from the mutant allele and retained within the cell, triggering increased ER stress and a UPR. The mutation produced a relatively severe form of MCDS. Nevertheless, treatment of the mice with carbamazepine (CBZ), a drug which stimulates intracellular proteolysis and alleviates ER stress, effectively reduced the disease severity in this model of MCDS caused by a premature stop codon in the Col10a1 gene. Specifically, the drug reduced ER stress in the growth plate, restored growth plate architecture toward the wild-type state, significantly increased bone growth and within 2 weeks of treatment corrected the MCDS-induced hip distortion. These results indicate that CBZ is likely to be effective in ongoing clinical trials against all forms of MCDS whether caused by premature stop codons or substitutions.