Myocardin is a cardiac- and smooth muscle-specific cofactor for the ubiquitous transcription factor serum response factor (SRF). Using gain-of-function approaches in the Xenopus embryo, we show that myocardin is sufficient to activate transcription of a wide range of cardiac and smooth muscle differentiation markers in non-muscle cell types. We also demonstrate that, for the myosin light chain 2 gene (MLC2), myocardin cooperates with the zinc-finger transcription factor Gata4 to activate expression. Inhibition of myocardin activity in Xenopus embryos using morpholino knockdown methods results in inhibition of cardiac development and the absence of expression of cardiac differentiation markers and severe disruption of cardiac morphological processes. We conclude that myocardin is an essential component of the regulatory pathway for myocardial differentiation.