Cell replacement therapy, while being a promising approach, is challenged by the limited supply of appropriate cells and incomplete understanding of the cardiac differentiation process. In this manuscript, we show the generation of spontaneously beating cardiomyocytes without using dimethylsulfoxide (DMSO), the most well-known cardiotrophic factor. Here, we employ basic fibroblast growth factor (FGF), a commonly used growth factor for embryonic stem (ES) cell differentiation, to initiate and maintain in vitro cardiac differentiation. Upon differentiation, beating or pulsating cardiac cells grown on tissue culture plates that interspersed with oval-shaped cells appeared after 1 week in culture. The number of beating colonies increased with time, and cells remained contractile for at least 45 days. Within 12 days of differentiation, these cells expressed markers characteristic of cardiomyocytes and hepatocytes such as GATA4, Nkx2.5, beta-myosin heavy chain, myosin light chain 2V, cardiac troponin T, sodium calcium exchanger and HNF-4alpha, alpha-fetoprotein, albumin, transthyretin, and CK-18, respectively. Thus, molecular and cellular characterization of these oval-shaped cells identified them as hepatocyte-like cells. Furthermore, we have identified a candidate set of signaling molecules like bone morphogenetic proteins (BMPs) and fibroblast growth factors (FGFs) and demonstrated their interactive role in in vitro cardiogenesis. To our knowledge, this is the first report elucidating the intrinsic signaling pathway of hepatocyte-like cells in the differentiation of cardiomyocytes from mouse ES cells without employing co-culture techniques. Hence, the study provides a significant insight into the mechanism of in vitro derivation of cardiomyocytes, mediated through interactive signaling with adjoining endodermal derivatives.