The $B^+ to D^{*-}K^+pi^+$ decay potentially provides an excellent way to investigate charm meson spectroscopy. The decay is searched for in a sample of proton-proton collision data collected with the LHCb detector at centre-of-mass energies of 7 and 8 TeV, corresponding to an integrated luminosity of $3~{rm fb}^{-1}$. A clear signal is observed, and the ratio of its branching fraction to that of the $B^+ to D^{*-}pi^+pi^+$ normalisation channel is measured to be begin{equation*} frac{mathcal{B}(B^+ to D^{*-}K^+pi^+)}{mathcal{B}(B^+ to D^{*-}pi^+pi^+)} = left( 6.39 pm 0.27 pm 0.48 right) times 10^{-2} , , end{equation*} where the first uncertainty is statistical and the second is systematic. This is the first observation of the $B^+ to D^{*-}K^+pi^+$ decay.