Cardiac chamber formation represents an essential evolutionary milestone that allows for the heart to receive (atrium) and pump (ventricle) blood throughout a closed circulatory system. Here, we reveal a novel transcriptional pathway between foxn4 and tbx genes that facilitates this evolutionary event. We show that the zebrafish gene slipjig, which encodes Foxn4, regulates the formation of the atrioventricular (AV) canal to divide the heart. sli/foxn4 is expressed in the AV canal, and its encoded product binds to a highly conserved tbx2 enhancer domain that contains Foxn4- and T-box-binding sites, both necessary to regulate tbx2b expression in the AV canal.