In the past decades, altered Follistatin-like 1 (FSTL1) expression has been documented in a variety of cancers, while its functional roles are poorly understood. Particularly in breast cancer, the expression of FSTL1 and its signaling pathway remain to be determined. In the present study, an elevated FSTL1 expression and a supressed cell proliferation were detected in a specific brain metastatic cell line MDA-MB-231-BR (231-BR), compared with its parental cell line MDA-MB-231. However, this protein was hardly detected in the other three breast cancer cell lines. Next, lentiviral vectors encoding FSTL1 or FSTL1 specific shRNAs were used to overexpress or knock down FSTL1 in MDA-MB-231 or 231-BR, respectively (MDA-MB-231(FSTL1) or 231-BRsh (FSTL1)). Results showed that overexpression of FSTL1 inhibited MDA-MB-231 cell proliferation, while knockdown of FSTL1 in 231-BR cells promotes cell proliferation, compared with their corresponding control groups. These results were further confirmed in nude mouse xenografts. The tumor volume in 231-BR cell-bearing mice was significantly smaller than that of MDA-MB-231 group, and reduction of tumor volume was detected in MDA-MB-231FSTL1 cell-bearing mice compared with the control group. Previous studies revealed that TGF-beta-Smad2/3 signaling pathway was activated in 231-BR and MDA-MB-231(FSTL1) cells, which may contribute to the inhibited cell proliferation. In addition, Smad3 knockdown could restore the inhibition of cell proliferation induced by FSTL1 overexpression in MDA-MB-231(FSTL1) cells, indicating that the anti-proliferative effect of FSTL1 overexpression may be associated with Smad3 involved TGF-beta signaling pathway regulation. This study identified FSTL1 as an inhibitor of cell proliferation in MDA-MB-231 and 231-BR cell lines, which may provide new insights into the development and management of breast cancer.