Bmp plays an important role in cardiomyocyte differentiation, but the function of Smad4 in Bmp signaling remains elusive. Here, we show that disruption of the Smad4 gene in cardiac progenitors expressing Sfrp5 led to embryonic lethality with hypoplastic heart formation. Although the expression of Nkx2-5 is regulated by Bmp signaling, expression of Nkx2-5 was weakly detected in the mutant heart. However, the nuclear translocation of Nkx2-5 was impaired. Expression of CK2 or PP1, which could alter the phosphorylation status of the NLS of Nkx2-5, was not affected, but Nkx2-5 was found to bind to Smad4 by co-immunoprecipitation experiments. Introduction of Smad4 into cells derived from Smad4 conditional knockout embryonic hearts restored the nuclear localization of Nkx2-5, and exogenous Nkx2-5 failed to translocate into the nucleus of Smad4-depleted fibroblasts. These results suggest that Smad4 plays an essential role in cardiomyocyte differentiation by controlling not only transcription but also the nuclear localization of Nkx2-5.