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Rationale: The role of FSTL-1 (follistatin-like 1) in lung homeostasis is unknown.Objectives: We aimed to define the impact of FSTL-1 attenuation on lung structure and function and to identify FSTL-1-regulated transcriptional pathways in the lung. Further, we aimed to analyze the association of FSTL-1 SNPs with lung disease.Methods: FSTL-1 hypomorphic (FSTL-1 Hypo) mice underwent lung morphometry, pulmonary function testing, and micro-computed tomography. Fstl1 expression was determined in wild-type lung cell populations from three independent research groups. RNA sequencing of wild-type and FSTL-1 Hypo mice identified FSTL-1-regulated gene expression, followed by validation and mechanistic in vitro examination. FSTL1 SNP analysis was performed in the COPDGene (Genetic Epidemiology of Chronic Obstructive Pulmonary Disease) cohort.Measurements and Main Results: FSTL-1 Hypo mice developed spontaneous emphysema, independent of smoke exposure. Fstl1 is highly expressed in the lung by mesenchymal and endothelial cells but not immune cells. RNA sequencing of whole lung identified 33 FSTL-1-regulated genes, including Nr4a1, an orphan nuclear hormone receptor that negatively regulates NF-κB (nuclear factor-κB) signaling. In vitro, recombinant FSTL-1 treatment of macrophages attenuated NF-κB p65 phosphorylation in an Nr4a1-dependent manner. Within the COPDGene cohort, several SNPs in the FSTL1 region corresponded to chronic obstructive pulmonary disease and lung function.Conclusions: This work identifies a novel role for FSTL-1 protecting against emphysema development independent of smoke exposure. This FSTL-1-deficient emphysema implicates regulation of immune tolerance in lung macrophages through Nr4a1. Further study of the mechanisms involving FSTL-1 in lung homeostasis, immune regulation, and NF-κB signaling may provide additional insight into the pathophysiology of emphysema and inflammatory lung diseases.