PRDM family members are transcriptional regulators involved in tissue specific differentiation. PRDM5 has been reported to predominantly repress transcription, but a characterization of its molecular functions in a relevant biological context is lacking. We demonstrate here that Prdm5 is highly expressed in developing bones; and, by genome-wide mapping of Prdm5 occupancy in pre-osteoblastic cells, we uncover a novel and unique role for Prdm5 in targeting all mouse collagen genes as well as several SLRP proteoglycan genes. In particular, we show that Prdm5 controls both Collagen I transcription and fibrillogenesis by binding inside the Col1a1 gene body and maintaining RNA polymerase II occupancy. In vivo, Prdm5 loss results in delayed ossification involving a pronounced impairment in the assembly of fibrillar collagens. Collectively, our results define a novel role for Prdm5 in sustaining the transcriptional program necessary to the proper assembly of osteoblastic extracellular matrix.