The genesis of the septal structures of the mammalian heart is central to understanding the ontogeny of congenital heart disease and the evolution of cardiac organogenesis. We found that Hedgehog (Hh) signaling marked a subset of cardiac progenitors specific to the atrial septum and the pulmonary trunk in the mouse. Using genetic inducible fate mapping with Gli1(CreERT2), we marked Hh-receiving progenitors in anterior and posterior second heart field splanchnic mesoderm between E8 and E10. In the inflow tract, Hh-receiving progenitors migrated from the posterior second heart field through the dorsal mesocardium to form the atrial septum, including both the primary atrial septum and dorsal mesenchymal protrusion (DMP). In the outflow tract, Hh-receiving progenitors migrated from the anterior second heart field to populate the pulmonary trunk. Abrogation of Hh signaling during atrial septal progenitor specification resulted in atrial and atrioventricular septal defects and hypoplasia of the developing DMP. Hedgehog signaling appeared necessary and sufficient for atrial septal progenitor fate: Hh-receiving cells rendered unresponsive to the Hh ligand migrated into the atrium in normal numbers but populated the atrial free wall rather than the atrial septum. Conversely, constitutive activation of Hh signaling caused inappropriate enlargement of the atrial septum. The close proximity of posterior second heart field cardiac progenitors to pulmonary endoderm suggested a pulmonary source for the Hh ligand. We found that Shh is required in the pulmonary endoderm for atrial septation. Therefore, Hh signaling from distinct pulmonary and pharyngeal endoderm is required for inflow and outflow septation, respectively. These data suggest a model in which respiratory endoderm patterns the morphogenesis of cardiac structural components required for efficient cardiopulmonary circulation.