Follistatin-like protein 1 (FSTL-1) has recently been described as a critical mediator of CIA and a marker of disease activity. Lyme arthritis, caused by Borrelia burgdorferi, shares similarities with autoimmune arthritis and the experimental murine model collagen-induced arthritis (CIA). Because FSTL-1 is important in CIA and autoimmune arthritides, and Lyme arthritis shares similarities with CIA, we hypothesized that FSTL-1 may be an important mediator of Lyme arthritis. We demonstrate for the first time that FSTL-1 is induced by B. burgdorferi infection and is required for the development of Lyme arthritis in a murine model, utilizing a gene insertion to generate FSTL-1 hypomorphic mice. Using qPCR and qRT-PCR, we found that despite similar early infectious burden, FSTL-1 hypomorphic mice have improved spirochetal clearance in the face of attenuated arthritis and inflammatory cytokine production. Further, FSTL-1 mediates pathogen-specific antibody production and antigen recognition when assessed by ELISA and one- and two-dimensional immunoblotting. This study is the first to describe a role for FSTL-1 in the development of Lyme arthritis and anti-Borrelia response, and the first to demonstrate a role for FSTL-1 in response to infection, highlighting the potential for FSTL-1 as a target in the treatment of B. burgdorferi infection.