The creation of regenerative stem cell therapies for heart disease requires that we understand the molecular mechanisms that govern the fates and differentiation of the diverse muscle and non-muscle cell lineages of the heart. Recently, different cardiac cell types have been reported to arise from a common, multipotent Islet1 (Isl1)-positive progenitor, suggesting that a clonal model of heart lineage diversification might occur that is analogous to hematopoiesis. The ability to isolate, renew and differentiate Isl1(+) precursors from postnatal and embryonic hearts and from embryonic stem cells provides a powerful cell-based system for characterizing the signaling pathways that control cardiovascular progenitor formation, renewal, lineage specification and conversion to specific differentiated progeny.