Glypicans are heparan sulphate proteoglycans (HSPGs) attached to the cell membrane by a glycosylphosphatidylinositol (GPI) anchor, and interact with various extracellular growth factors and receptors. The Drosophila division abnormal delayed (dally) was the first glypican loss-of-function mutant described that displays disrupted cell divisions in the eye and morphological defects in the wing. In human, as in most vertebrates, six glypican-encoding genes have been identified (GPC1-6), and mutations in several glypican genes cause multiple malformations including congenital heart defects. To understand better the role of glypicans during heart development, we studied the zebrafish knypek mutant, which is deficient for Gpc4. Our results demonstrate that knypek/gpc4 mutant embryos display severe cardiac defects, most apparent by a strong reduction in cardiomyocyte numbers. Cell-tracing experiments, using photoconvertable fluorescent proteins and genetic labeling, demonstrate that Gpc4 'Knypek' is required for specification of cardiac progenitor cells and their differentiation into cardiomyocytes. Mechanistically, we show that Bmp signaling is enhanced in the anterior lateral plate mesoderm of knypek/gpc4 mutants and that genetic inhibition of Bmp signaling rescues the cardiomyocyte differentiation defect observed in knypek/gpc4 embryos. In addition, canonical Wnt signaling is upregulated in knypek/gpc4 embryos, and inhibiting canonical Wnt signaling in knypek/gpc4 embryos by overexpression of the Wnt inhibitor Dkk1 restores normal cardiomyocyte numbers. Therefore, we conclude that Gpc4 is required to attenuate both canonical Wnt and Bmp signaling in the anterior lateral plate mesoderm to allow cardiac progenitor cells to specify and differentiate into cardiomyocytes. This provides a possible explanation for how congenital heart defects arise in glypican-deficient patients.