Lysyl hydroxylase (LH) isoform 3 is a post-translational enzyme possessing LH, collagen galactosyltransferase (GT) and glucosyltransferase (GGT) activities. We have demonstrated that LH3 is found not only intracellularly, but also on the cell surface and in the extracellular space, suggesting additional functions for LH3. Here we show that the targeted disruption of LH3 by siRNA causes a marked reduction of both glycosyltransferase activities, and the overexpression of LH3 in HT-1080 cells increases hydroxylation of lysyl residues and the subsequent galactosylation and glucosylation of hydroxylysyl residues. These data confirm the multifunctionality of LH3 in cells. Furthermore, treatment of cells in culture medium with a LH3 N-terminal fragment affects the cell behavior, rapidly leading to arrest of growth and further to lethality if the fragment is glycosyltransferase-deficient, and leading to stimulation of proliferation if the fragment contains LH3 glycosyltransferase activities. The effect is reversible, the cells recovering after removal of the glycosyltransferase-deficient fragment. The findings were confirmed by overexpressing the full-length LH3 in native or mutated forms in the cells. The data indicate that the increase in proliferation depends on the glycosyltransferase activity of LH3. The overexpression of a glycosyltransferase-deficient mutant or targeted disruption of LH3 by siRNA in cells results in abnormal cell morphology followed by cell death. Our data clearly indicate that the deficiency of LH3 glycosyltransferase activities, especially in the extracellular space, causes growth arrest revealing the importance of the glycosyltransferase activities of LH3 for cell growth and viability, and identifying LH3 as a potential target for medical applications, such as cancer therapy.