Our previous studies and those of others indicated that the transcription factor Hexamethylene-bis-acetamide-inducible protein 1 (HEXIM1) is a tumor suppressor and cyclin-dependent kinase inhibitor, and that these HEXIM1 functions are mainly dependent on its C-terminal region. We provide evidence here that the HEXIM1 C-terminal region is critical for cardiovascular development. HEXIM1 protein was detected in the heart during critical time periods in cardiac growth and chamber maturation. We created mice carrying an insertional mutation in the HEXIM1 gene that disrupted its C-terminal region and found that this resulted in prenatal lethality. Heart defects in HEXIM1(1 to 312) mice included abnormal coronary patterning and thin ventricular walls. The thin myocardium can be partly attributed to increased apoptosis. Platelet endothelial cell adhesion molecular precursor-1 staining of HEXIM1(1 to 312) heart sections revealed decreased vascularization of the myocardium despite the presence of coronary vasculature in the epicardium. The expression of vascular endothelial growth factor (VEGF), known to affect angioblast invasion and myocardial proliferation and survival, was decreased in HEXIM1(1 to 312) mice compared with control littermates. We also observed decreased fibroblast growth factor 9 (FGF9) expression, suggesting that effects of HEXIM1 in the myocardium are partly mediated through epicardial FGF9 signaling. Together our results suggest that HEXIM1 plays critical roles in coronary vessel development and myocardial growth. The basis for this role of HEXIM1 is that VEGF is a direct transcriptional target of HEXIM1, and involves attenuation a repressive effects of C/EBPalpha on VEGF gene transcription.