Hypoxic injury hinders placental differentiation and alters trophoblast gene expression. We tested the hypothesis that the expression of follistatin-like 3 (FSTL3), a member of the follistatin family of proteins, is modulated by hypoxia in primary human trophoblast (PHT). Using immunofluorescence of human term placental villi we detected the expression of FSTL3 protein in placental villi, primarily in trophoblasts. We verified this finding in cultured term PHT cells. Basal expression of FSTL3 transcript in cultured PHT cells, determined using quantitative PCR, was stable over the culture period. Importantly, when compared to culture in FiO(2)=20% or FiO(2)=8%, PHT cells cultured in FiO(2) <1% exhibited a 4-6 fold increase in FSTL3 mRNA expression as early as 4h in hypoxia. Whereas cellular FSTL3 protein was unchanged in hypoxia, we found that hypoxia increased the level of FSTL3 in the medium. Lastly, the exposure of PHT cells to either the hypoxia-mimetic cobalt chloride or the proline hydroxylase inhibitor dimethyloxaloylglycine upregulated the expression of FSTL3 transcript. Our data indicate that hypoxia enhances the expression of FSTL3 and its release from PHT cells. Our finding that hypoxia-mimetic agents enhance FSTL3 expression implicates HIF1alpha in this process.