CONTEXT: Follistatin is a glycoprotein that binds and neutralizes biological activities of TGFbeta superfamily members including activin and myostatin. We previously identified by expression profiling that follistatin levels in white adipose tissue (WAT) were regulated by obesity. OBJECTIVE: The objective of the study was to elucidate the role of follistatin in human WAT and obesity. DESIGN: We measured secreted follistatin protein from WAT biopsies and fat cells in vitro. We also quantified follistatin mRNA expression in sc and visceral WAT and in WAT-fractionated cells and related it to obesity status, body region, and cellular origin. We investigated the effects of follistatin on adipocyte differentiation of progenitor cells in vitro. PARTICIPANTS: Women (n = 66) with a wide variation in body mass index were recruited by advertisement and from a clinic for weight-reduction therapy. RESULTS: WAT secreted follistatin in vitro. Follistatin mRNA levels in sc but not visceral WAT were decreased in obesity and restored to nonobese levels after weight reduction. Follistatin mRNA levels were high in the stroma-vascular fraction of WAT and low in adipocytes. Recombinant follistatin treatment promoted adipogenic differentiation of progenitor cells and neutralized the inhibitory action of myostatin on differentiation in vitro. Moreover, activin and myostatin signaling receptors were detected in WAT and adipocytes. CONCLUSION: Follistatin is a new adipokine important for adipogenesis. Down-regulated WAT expression of follistatin in obesity may counteract adiposity but could, by inhibiting adipogenesis, contribute to hypertrophic obesity (large fat cells) and insulin resistance