Follistatin like-1 (FSTL-1) is a secreted glycoprotein of mesenchymal in origin. In human skin, FSTL1 is upregulated in the epidermal keratinocytes upon acute injury and is required for the migration of keratinocytes. Failure to upregulate FSTL1 leads to the lack of keratinocyte migration and the non-healing nature of diabetic foot ulcer (DFU). FSTL1 undergoes extensive post-translational modification (PTM) at specific residues. Glycosylation at N144, N175 and N180, are the only experimentally demonstrated PTM in FSTL1, wherein, N180 and N144 glycosylations have been found to be critical for its function in cardiac tissue regeneration and pre-adipocyte differentiation, respectively. However, it is not known if PTMs other than glycosylation occurs in FSTL1 and how it impacts its pro-migratory function. Using in-silico analysis of mass spectrometric datasets, we found a novel PTM, namely, Serine 165 (S165) phosphorylation in FSTL1. To address the role of S165 phosphorylation in its pro-migratory function, a phosphorylation defective mutant of FSTL1 (S165A) was constructed by converting serine 165 to alanine and over expressed in 293T cells. S165A mutation did not affect the secretion of FSTL1 in vitro. However, S165A abolished the pro-migratory effect of FSTL1 in cultured keratinocytes likely via its inability to facilitate ERK signaling pathway. Interestingly, bacterially expressed recombinant FSTL1, trans-dominantly inhibited wound closure in keratinocytes highlighting the prime role of FSTL1 phosphorylation for its pro-migratory function. Further, under high glucose conditions, which inhibited scratchwound migration of keratinocytes, we noticed a significant decrease in S165 phosphorylation. Taken together, our results reveal a hitherto unreported role of FSTL1 phosphorylation PTM with profound implications in wound healing.