Follistatin (FST), a member of the transforming growth factor‐β (TGF‐β) superfamily, has been identified as an inhibitor of follicle‐stimulating hormone. Previous studies showed that it plays an important role in animal reproduction. Therefore, this study aims to investigate its effect on the maturation of buffalo oocytes in vitro, and the underlying mechanism of FST affecting oocyte maturation was also explored in buffalo cumulus cells. Results showed that FST was enriched in the ovary and expressed at different stages of buffalo ovarian follicles as well as during oocyte maturation and early embryo development. The FST expression level was up‐regulated in MII buffalo oocytes compared with the GV stage (p < .05). To study the effects of FST on buffalo oocytes' maturation and early embryonic development, we added the pcD3.1 skeleton vector and PCD3.1‐EGFP‐FST vector into the maturation fluid of buffalo oocytes, respectively. It was demonstrated that FST promoted the in vitro maturation rate of buffalo oocytes and the blastocyst rate of embryos cultured in vitro (p < .05). By interfering with FST expression, we discovered that FST in cumulus cells plays a crucial role in oocyte maturation. Interference with the FST expression during the buffalo oocyte maturation did not affect the first polar body rate of buffalo oocyte (p > .05). In contrast, the location of mitochondria in oocytes was abnormal, and the cumulus expansion area was reduced (p < .05). After parthenogenetic activation, the cleavage and blastocyst rates of the FST‐interfered group were reduced (p < .05). Furthermore, RT‐qPCR was performed to investigate further the underlying mechanism by which FST enhances oocyte maturation. We found that overexpression of FST could up‐regulate the expression level of apoptosis suppressor gene Bcl‐2 and TGF‐β/SMAD pathway‐related genes TGF‐β, SMAD2, and SMAD3 (p < .05). In contrast, the expression levels of SMAD4 and pro‐apoptotic gene BAX were significantly decreased (p < .05). The FST gene could affect buffalo oocyte maturation by regulating the oocyte mitochondria integrity, the cumulus expansion, cumulus cell apoptosis, and the expression levels of TGF‐β/SMAD pathway‐related genes.