Marinesco-Sjögren syndrome (MSS) is an autosomal recessive, neurodegenerative, multisystem disorder characterized by severe phenotypes developing in infancy. Recently, mutations in the endoplasmic reticulum (ER)-associated co-chaperone SIL1/BAP were identified to be the major cause of MSS. SIL1 acts as a nucleotide exchange factor for BiP, the ER Hsp70 orthologue, which plays an essential role in the folding and assembly of nascent polypeptide chains in the ER. SIL1 facilitates the release of BiP from unfolded protein substrates, enabling the subsequent folding and transport of the protein. Although most mutations leading to MSS result in deletion of the majority of the protein, three separate mutations have been identified that disrupt only the last five or six amino acids of the protein, which were assumed to encode a divergent ER retention motif. This study presents an in depth analysis of two of these mutants and reveals that the phenotype in the affected individuals is not likely to be due to depletion of SIL1 from the ER via secretion. Instead, our analyses show that the mutant proteins are particularly unstable and either form large aggregates in the ER or are rapidly degraded via the proteasome. In agreement with our findings, homology modeling suggests that the very C-terminal residues of SIL1 play a role in its structural integrity rather than its localization. These new insights might be a first step toward a possible pharmacological treatment of certain types of MSS by specifically stabilizing the mutant SIL1 protein.