Folliculostellate cells of the anterior pituitary are postulated to be an important source of factors, such as follistatin, that regulate pituitary function by intercellular communication. To gain further insight into the function of this cell type, folliculostellate cells were enriched from cultured rat anterior pituitary cells, and an immortalized cell line designated FS/D1h was established and characterized. These FS/D1h cells express S100 immunoreactivity and produce IL-6 but not pituitary hormones such as GH, ACTH, FSH, and LH. Importantly, FS/D1h cells express large amounts of follistatin mRNA and secrete the protein, as quantified indirectly by the amount of [(125)I]activin A immunoprecipitated with a follistatin antiserum. The FS/D1h cells also express alpha, betaA, and betaB inhibin/activin subunit mRNAs, but whether they produce the corresponding activins and inhibins has not been determined. The response of FS/D1h cells to agents thought to modulate folliculostellate cell function was evaluated. IL-1beta (0.005-5 nM) stimulated the secretion of follistatin and increased mRNA expression. In parallel, IL-6 secretion was stimulated. Dexamethasone, pituitary adenylate cyclase-activating polypeptide(1-27), and lipopolysaccharide but not testosterone, 12-O-tetradecanoylphorbol-13-acetate, or forskolin also increased follistatin secretion. Surprisingly, activin had no effect on follistatin mRNA levels, despite the fact that FS/D1h cells express ActRII, ActRIIB, and ALK-4 (ActRIB). Activin, on the other hand, induced Smad7 mRNA accumulation and exerted an antiproliferative effect on FS/D1h cells. Altogether, these observations support the possibility that follistatin originating from folliculostellate cells participates in mediating the effects of IL-1beta, glucocorticoids, and other agents on the response of pituitary cells to activins.