Nkx2.5 is expressed in the cardiogenic mesoderm of avian, mouse, and amphibian embryos. To understand how various cardiac fates within this domain are apportioned, we fate mapped the mesodermal XNkx2.5 domain of neural tube stage Xenopus embryos. The lateral portions of the XNkx2.5 expression domain in the neural tube stage embryo (stage 22) form the dorsal mesocardium and roof of the pericardial cavity while the intervening ventral region closes to form the myocardial tube. XNkx2.5 expression is maintained throughout the period of heart tube morphogenesis and differentiation of myocardial, mesocardial, and pericardial tissues. A series of microsurgical experiments showed that myocardial differentiation in the lateral portion of the field is suppressed during normal development by signals from the prospective myocardium and by tissues located more dorsally in the embryo, in particular the neural tube. These signals combine to block myogenesis downstream of XNkx2.5 and at or above the level of contractile protein gene expression. We propose that the entire XNkx2.5/heart field is transiently specified as cardiomyogenic. Suppression of this program redirects lateral cells to adopt dorsal mesocardial and dorsal pericardial fates and subdivides the field into distinct myogenic and nonmyogenic compartments.