The Democrat's campaign and the TV network issued a joint statement Friday announcing the settlement, which includes no payment of money.
At issue was an ad showing a clip from a January 2006 interview of Republican Roy Blunt in which Fox News journalist Christopher Wallace cited some of Blunt's past actions and questioned whether he was the right person to clean up ethical issues in the U.S. House. The ad did not show Blunt's response.
In the settlement, Carnahan's campaign acknowledged its use of Fox News footage exceeded what was permitted but said it had believed it was allowable.
Blunt defeated Carnahan.