Isl1(+) cardiovascular progenitors and their downstream progeny play a pivotal role in cardiogenesis and lineage diversification of the heart. The mechanisms that control their renewal and differentiation are largely unknown. Herein, we show that the Wnt/beta-catenin pathway is a major component by which cardiac mesenchymal cells modulate the prespecification, renewal, and differentiation of isl1(+) cardiovascular progenitors. This microenvironment can be reconstituted by a Wnt3a-secreting feeder layer with ES cell-derived, embryonic, and postnatal isl1(+) cardiovascular progenitors. In vivo activation of beta-catenin signaling in isl1(+) progenitors of the secondary heart field leads to their massive accumulation, inhibition of differentiation, and outflow tract (OFT) morphogenic defects. In addition, the mitosis rate in OFT myocytes is significantly reduced following beta-catenin deletion in isl1(+) precursors. Agents that manipulate Wnt signals can markedly expand isl1(+) progenitors from human neonatal hearts, a key advance toward the cloning of human isl1(+) heart progenitors.