Tonne-Kalscheuer syndrome (TOKAS) is an X-linked intellectual disability syndrome associated with variable clinical features including craniofacial abnormalities, hypogenitalism and diaphragmatic hernia. TOKAS is caused exclusively by variants in the gene encoding the E3 ubiquitin ligase gene RLIM, also known as RNF12. Here we report identification of a novel RLIM missense variant, c.1262A>G p.(Tyr421Cys) adjacent to the regulatory basic region, which causes a severe form of TOKAS resulting in perinatal lethality by diaphragmatic hernia. Inheritance and X-chromosome inactivation patterns implicate RLIM p.(Tyr421Cys) as the likely pathogenic variant in the affected individual and within the kindred. We show that the RLIM p.(Tyr421Cys) variant disrupts both expression and function of the protein in an embryonic stem cell model. RLIM p.(Tyr421Cys) is correctly localised to the nucleus, but is readily degraded by the proteasome. The RLIM p.(Tyr421Cys) variant also displays significantly impaired E3 ubiquitin ligase activity, which interferes with RLIM function in Xist long-non-coding RNA induction that initiates imprinted X-chromosome inactivation. Our data uncover a highly disruptive missense variant in RLIM that causes a severe form of TOKAS, thereby expanding our understanding of the molecular and phenotypic spectrum of disease severity.