Although retinoic acid (RA) teratogenicity has been investigated for decades, the mechanisms underlying RA-induced outflow tract (OFT) malformations are not understood. Here, we show zebrafish embryos deficient for Cyp26a1 and Cyp26c1 enzymes, which promote RA degradation, have OFT defects resulting from two mechanisms: first, a failure of second heart field (SHF) progenitors to join the OFT, instead contributing to the pharyngeal arch arteries (PAAs), and second, a loss of first heart field (FHF) ventricular cardiomyocytes due to disrupted cell polarity and extrusion from the heart tube. Molecularly, excess RA signaling negatively regulates fibroblast growth factor 8a (fgf8a) expression and positively regulates matrix metalloproteinase 9 (mmp9) expression. Although restoring Fibroblast growth factor (FGF) signaling can partially rescue SHF addition in Cyp26 deficient embryos, attenuating matrix metalloproteinase (MMP) function can rescue both ventricular SHF addition and FHF integrity. These novel findings indicate a primary effect of RA-induced OFT defects is disruption of the extracellular environment, which compromises both SHF recruitment and FHF ventricular integrity.