The proepicardium is a transient extracardiac embryonic tissue that gives rise to the epicardium and a number of coronary vascular cell lineages. This important extracardiac tissue develops through multiple steps of inductive events, from specification of multiple cell lineages to morphogenesis. This article will review our current understanding of inductive events involved in patterning of the proepicardium precursor field, specification of cell types within the proepicardium, and their extension and attachment to the heart.