The circulating (FST315) and tissue bound (FST288) forms of follistatin modulate the actions of activins. Follistatin knockout (KO/null) mice, lacking both isoforms, die perinatally with defects in lung, skin and the musculoskeletal system. Using constructs of the human follistatin gene engineered to enable expression of each isoform under the control of natural regulatory elements, transgenic mouse lines were created and crossed with follistatin null mice to attempt to rescue the neonatal lethality. FST288 expression alone did not rescue the neonatal lethality, but mice expressing FST315 on the KO background survived to adulthood with normal lung and skin morphology and partial reversal of the musculoskeletal defects noted in follistatin KO mice. The FST315 "rescue" mice displayed a short period of neonatal growth retardation, impaired tail growth and female infertility. The latter may be due to failure of corpus luteum formation, a decline in the ovarian follicular population and an augmented uterine inflammatory response to mating. Failure of corpus luteum formation and impaired tail growth indicate abnormal vascularization and suggest that FST288 is required for the promotion of angiogenesis. The augmented uterine inflammatory response may result from the failure of FST315 to modulate the pro-inflammatory actions of activin A in the uterus or may result from the altered steroid milieu associated with the ovarian abnormalities. While we cannot definitively conclude that the remaining defects are due to the absence of a particular isoform or due to variable expression of each, these models have demonstrated novel physiological processes that are influenced by follistatin.