Congenital heart defects can be caused by mutations in genes that guide cardiac lineage formation. Here, we show deletion of NKX2-5, a critical component of the cardiac gene regulatory network, in human embryonic stem cells (hESCs), results in impaired cardiomyogenesis, failure to activate VCAM1 and to downregulate the progenitor marker PDGFRα. Furthermore, NKX2-5 null cardiomyocytes have abnormal physiology, with asynchronous contractions and altered action potentials. Molecular profiling and genetic rescue experiments demonstrate that the bHLH protein HEY2 is a key mediator of NKX2-5 function during human cardiomyogenesis. These findings identify HEY2 as a novel component of the NKX2-5 cardiac transcriptional network, providing tangible evidence that hESC models can decipher the complex pathways that regulate early stage human heart development. These data provide a human context for the evaluation of pathogenic mutations in congenital heart disease.