Epicardium and epicardium‐derived cells have been shown to be necessary for myocardial differentiation. To elucidate the function of podoplanin in epicardial development and myocardial differentiation, we analyzed podoplanin knockout mouse embryos between embryonic day (E) 9.5 and E15.5 using immunohistochemical differentiation markers, morphometry, and three‐dimensional reconstructions. Podoplanin null mice have an increased embryonic lethality, possibly of cardiac origin. Our study reveals impairment in the development of the proepicardial organ, epicardial adhesion, and spreading and migration of the epicardium‐derived cells. Mutant embryos show a hypoplastic and perforated compact and septal myocardium, hypoplastic atrioventricular cushions resulting in atrioventricular valve abnormalities, as well as coronary artery abnormalities. The epicardial pathology is correlated with reduced epithelial–mesenchymal transformation caused by up‐regulation of E‐cadherin, normally down‐regulated by podoplanin. Our results demonstrate a role for podoplanin in normal cardiac development based on epicardial–myocardial interaction. Abnormal epicardial differentiation and reduced epithelial–mesenchymal transformation result in deficient epicardium‐derived cells leading to myocardial pathology and cardiac anomalies. Developmental Dynamics 237:847–857, 2008. © 2008 Wiley‐Liss, Inc.