Birt-Hogg-Dube' Syndrome (BHDS) is a rare genetic disorder in humans characterized by skin hamartomas, lung cysts, pneumothorax, and increased risk of renal tumors. BHDS is caused by mutations in the BHD gene, which encodes for Folliculin, a cytoplasmic adapter protein that binds to Folliculin interacting proteins-1 and -2 (Fnip1, Fnip2) as well as the master energy sensor AMP kinase (AMPK). Whereas kidney-specific deletion of the Bhd gene in mice is known to result in polycystic kidney disease (PKD) and renal cell carcinoma, the roles of Fnip1 in renal cell development and function are unclear. In this study, we utilized mice with constitutive deletion of the Fnip1 gene to show that the loss of Fnip1 is sufficient to result in renal cyst formation, which was characterized by decreased AMPK activation, increased mTOR activation, and metabolic hyperactivation. Using RNAseq, we found that Fnip1 disruption resulted in many cellular and molecular changes previously implicated in the development of PKD in humans, including alterations in the expression of ion and amino acid transporters, increased cell adhesion, and increased inflammation. Loss of Fnip1 synergized with Tsc1 loss to hyperactivate mTOR, increase Erk activation, and greatly accelerate the development of PKD. Our results collectively define roles for Fnip1 in regulating kidney development and function, and provide a model for how loss of Fnip1 contributes to PKD and perhaps renal cell carcinoma.