Hypotrichosis simplex (HS) is a group of isolated alopecias that can be inherited as an autosomal-dominant or an autosomal-recessive trait. Hair loss usually begins in early childhood, and is diffuse and progressive. Mutations in LIPH, which encodes lipase member H, have recently been shown to cause an autosomal-recessive form of HS. Here we describe an Austrian HS patient who was found to be carrying compound heterozygous mutations in the LIPH gene: a 7-bp frameshift duplication (c.403409dup; p.Gln137HisfsX1) and a recently reported 30-amino acid in-frame duplication (c.280369dup; p.Gly94Lys123dup). To examine the impact of LIPH mutations on lipid metabolism, we established an in vitro assay to measure the action of this phospholipase in a cell-based system. Both the 7-bp duplication frameshift mutation and all known in-frame mutations were observed to reduce the in vitro activity of the lipase in response to the addition of phosphatidic acid, the substrate of lipase H. The reduced production of lysophosphatidic acid (LPA) led to a reduced response of cells expressing the human G-protein-coupled receptor p2y5 (p2y5) receptor. Our study increases the spectrum of known LIPH mutations and provides biochemical evidence for the important role of lipase H and its product LPA in human hair growth.