Follistatin-like protein 1 (FSTL1) is a secreted glycoprotein produced mainly by cells of mesenchymal origin. FSTL1 has been shown to play an important role during embryogenesis; FSTL1-deficient mice die at birth from multiple developmental abnormalities. In the last decade, FSTL1 has been identified as a novel inflammatory protein, enhancing synthesis of proinflammatory cytokines and chemokines by immune cells in vitro and in vivo. FSTL1 mediates proinflammatory events in animal models of inflammatory diseases, particularly in collagen-induced arthritis in mice. FSTL1 is elevated in various inflammatory conditions and decreased during the course of treatment. FSTL1 may therefore be a valuable biomarker for such diseases. Moreover, a variety of experiments suggest that targeting of FSTL1 may be useful in the treatment of diseases in which inflammation plays a central role.