Activin and myostatin are related members of the TGF- growth factor superfamily. FSTL3 (Follistatin-like 3) is an activin and myostatin antagonist whose physiological role in adults remains to be determined. We found that homozygous FSTL3 knockout adults developed a distinct group of metabolic phenotypes, including increased pancreatic islet number and size,  cell hyperplasia, decreased visceral fat mass, improved glucose tolerance, and enhanced insulin sensitivity, changes that might benefit obese, insulin-resistant patients. The mice also developed hepatic steatosis and mild hypertension but exhibited no alteration of muscle or body weight. This combination of phenotypes appears to arise from increased activin and myostatin bioactivity in specific tissues resulting from the absence of the FSTL3 antagonist. Thus, the enlarged islets and  cell number likely result from increased activin action. Reduced visceral fat is consistent with a role for increased myostatin action in regulating fat deposition, which, in turn, may be partly responsible for the enhanced glucose tolerance and insulin sensitivity. Our results demonstrate that FSTL3 regulation of activin and myostatin is critical for normal adult metabolic homeostasis, suggesting that pharmacological manipulation of FSTL3 activity might simultaneously reduce visceral adiposity, increase  cell mass, and improve insulin sensitivity.embers of the TGF- superfamily of growth factors play diverse roles in embryonic development as well as in organ homeostasis and injury/pathogen response in adults (1). Activin and myostatin form one structurally related branch of the TGF- family that utilizes common cell-surface receptors and Smad second messengers (2-4). Activin is a critical regulator of embryonic cell fate determination and organ development as well as adult organ homeostasis (5). Activin deletion in mice results in developmental defects and early neonatal death (6), whereas activin overexpression results in cancer, cachexia, and liver necrosis (3,7,8). Loss of myostatin expression results in increased muscle mass and reduced adiposity (9-11), whereas overexpression of myostatin leads to a severe reduction of both muscle and adipose tissue mass, along with cachexia (12, 13). These findings demonstrate the requirement for tight regulation of activin and myostatin activity to maintain normal adult physiology.Regulation of activin and myostatin activity occurs at multiple levels. Among the extracellular regulators, FSTL3 (follistatin like-3) and FST (follistatin) are structurally and functionally related glycoproteins that bind and antagonize actions of both activin and myostatin (14, 15). FSTL3 expression is highest in placenta, followed by testis, pancreas, and heart, whereas FST expression is high in ovary, testis, and kidney, suggesting that they may have nonoverlapping actions in different organs (16). Circulating FST was largely bound to activin (17), whereas FSTL3 was isolated from human and mouse serum as a complex with myostatin (18), indicating that F...