Follistatin (FST) and FST-like-3 (FSTL3) are structurally related proteins that bind and neutralize activin and closely related members of the TGFbeta superfamily. Three FST isoforms (FST288, FST303, and FST315) are produced from the Fst gene that are primarily secreted proteins. FSTL3 is secreted, but is also observed within the nucleus of most cells. We used pulse-chase (35)S labeling to examine the biosynthetic and intracellular transport patterns that lead to differential secretion and intracellular retention of these proteins. Among the FST isoforms, FST315 was secreted fastest and FST288 was secreted more slowly, with some remaining intracellular. In contrast, FSTL3 was secreted the slowest, with newly synthesized proteins being both secreted and trafficked to the nucleus. This nuclear FSTL3 was N-glycosylated, although not to the same degree as secreted FSTL3. Both FST and FSTL3 have two Mets in their signal sequence. Mutation of the first Met in FST288 eliminated protein translation, whereas FSTL3 could be translated from either Met. However, although FSTL3 translated from the second Met, which had no signal sequence, was confined to the nucleus, it was not glycosylated. Interestingly, this FSTL3 retained activin-antagonizing activity. Thus, although bioactive, nuclear FSTL3 can be translated from the second Met when the first Met is mutated, the glycosylated nuclear FSTL3 produced endogenously indicates that a different mechanism must be used under natural conditions that apparently includes N-glycosylation. Moreover, the differential biosynthetic and intracellular transport patterns for FST288 and FSTL3 suggest that these two activin-binding proteins may have distinct intracellular roles.