Bone morphogenetic protein (BMP) signaling regulates vascular smooth muscle maturation, endothelial cell proliferation, and tube formation. The endogenous BMP antagonist Follistatin-like 1 (Fstl1) is highly expressed in pulmonary vascular endothelium of the developing mouse lung, suggesting a role in pulmonary vascular formation and vascular homeostasis. The aim of this study was to investigate the role of Fstl1 in the pulmonary vascular endothelium. To this aim, Fstl1 was conditionally deleted from endothelial and endothelial-derived cells using Tie2-cre driven Fstl1-KO mice (Fstl1-eKO mice). Endothelial-specific Fstl1 deletion was postnatally lethal, as ∼70% of Fstl1-eKO mice died at three weeks after birth. Deletion of Fstl1 from endothelium resulted in a reduction of right ventricular output at three weeks after birth compared with controls. This was associated with pulmonary vascular remodeling, as the percentage of actin-positive small pulmonary vessels was increased at three weeks in Fstl1-eKO mice compared with controls. Endothelial deletion of Fstl1 resulted in activation of Smad1/5/8 signaling and increased BMP/Smad-regulated gene expression of Jagged1, Endoglin, and Gata2 at one week after birth compared with controls. In addition, potent vasoconstrictor Endothelin-1, the expression of which is driven by Gata2, was increased in expression, both on the mRNA and protein levels, at one week after birth compared with controls. At three weeks, Jagged1 was reduced in the Fstl1-eKO mice whereas Endoglin and Endothelin-1 were unchanged. In conclusion, loss of endothelial Fstl1 in the lung is associated with elevated BMP-regulated genes, impaired small pulmonary vascular remodeling, and decreased right ventricular output.