Dermatofibromas (DFs) are common, benign fibrous skin tumors that can occur at any skin site. In most cases, DFs are solitary and sporadic, but a few are multiple and familial, and the mechanisms leading to these lesions are currently unclear. Using exome sequencing, we have identified a heterozygous variant in a pedigree with autosomal dominant multiple familial DF within RND3 (c.692C>T,p.T231M) that encodes for the small GTPase RhoE, a regulator of the actin cytoskeleton. Expression of T231M-RhoE or RhoE depletion using CRISPR in human dermal fibroblasts increased proliferation and adhesion to extracellular matrix through enhanced β1 integrin activation and more disorganized matrix. The enzyme PLOD2 was identified as a binding partner for RhoE, and the formation of this complex was disrupted by T231M-RhoE. PLOD2 promotes collagen cross-linking and activation of β1 integrins, and depleting PLOD2 in T231M-RhoE–expressing cells reduced T231M-RhoE–mediated β1 integrin activation and led to increased matrix alignment. Immunohistochemical analysis revealed reduced expression of RhoE but increased expression of PLOD2 in the dermis of DF skin samples compared with that of the controls. Our data show that loss of RhoE function leads to increased PLOD2 activation, enhancing integrin activation and leading to a disorganized extracellular matrix, contributing to DF.