Cardiac cell regeneration from endogenous cardiac stem cells (CSCs) following MI is rather low. Therefore, identifying mechanisms to boost endogenous CSC activation and participation in cardiac repair appears to be the most promising strategy for MI patients. We previously engineered tissue inhibitor of metalloproteinases-1 (TIMP-1) overexpressing embryonic stem (ES-TIMP-1) cells and transplanted them into the infarcted murine heart. Collected data demonstrated that TIMP-1 enhanced transplanted ES cell engraftment, survival and differentiation into cardiac myocytes post-transplantation. Therefore, we postulated that there may be a new stem cell population present in the heart that is regulated by extracellular protein TIMP-1. Furthermore, we hypothesized that this cell population has a potential for cell proliferation and differentiation into cardiac cell types. Therefore, we isolated CSCs from 4 weeks old C57BL/6 mice and cultured them in vitro in presence of ESCM, ES-TIMP-1-CM or TIMP-1. Our immunostaining data demonstrated the existence of a novel CSC subpopulation, CD63(+ve)/c-kit(+ve). When treated with TIMP-1, these cells showed significantly (p < 0.05) increased proliferation rates compared to control cells, enhanced TIMP-1 receptor (CD63), along with improved expression of phospho and total β-catenin proteins as demonstrated by Western blot analysis. Next, we demonstrate significantly (p < 0.05) improved cardiac myocyte, vascular smooth muscle cell, and endothelial cell differentiation. Furthermore, our RT-PCR data shows increase in cardiac gene (GATA-4, Mef2C, and Nkx-2.5) expression when compared to ESCM and control cells. Collectively, these data, for the first time, establish the existence of a new CD63(+ve)/c-kit(+ve) CSC subpopulation that has a significant potential for proliferation and differentiation into cardiac cell types once stimulated with TIMP-1.