Extracellular glycoprotein Follistatin-like protein 1 (FSTL1) has been reported to be involved in multiple signaling pathways and biological processes during development and disease. In addition, some mouse studies have suggested an inhibitory role of FSTL1 in BMP signaling, in certain context. Yet, whether FSTL1 has biological functions in early heart development are largely unknown. In our functional studies, CRISPR/Cas9 genome editing was used to create fstl1a and fstl1b insertion/deletion mutations in zebrafish and our results suggest that fstl1b is important in regulating heart development during early embryogenesis. in situ hybridization revealed that fstl1b transcripts are expressed in the developing zebrafish heart, and fstl1b homozygous (-/-) mutant exhibited pericardial edema and showed significantly reduced contractility in the ventricle, with incomplete penetrance. We found that zebrafish fstl1b (-/-) mutant hearts formed a collapsed ventricle with strong reductions in the sarcomere structure protein alpha-actinin, although the number of cardiomyocytes was comparable to wild type control siblings. Further, normal levels of fstl1b seems to prevent the expansion of Bmp signaling into ventricular myocytes, which is consistent with the previously established model of Bmp-dependent cardiac contraction. Together these results reveal the zebrafish ortholog fstl1b regulates sarcomere structure and cardiac contractile function. In vertebrate developing heart, it might function as a key component in a novel pathway that constrains Bmp signaling from ventricular myocytes.