Sarcomeric signaling complexes are important to sustain proper sarcomere structure and function, however, the mechanisms underlying these processes are not fully elucidated. In a gene trap experiment, we found that vascular cell adhesion protein 1 isoform X2 (VCAP1X2) mutant embryos displayed a dilated cardiomyopathy phenotype, including reduced cardiac contractility, enlarged ventricular chamber and thinned ventricular compact layer. Cardiomyocyte and epicardial cell proliferation was decreased in the mutant heart ventricle, as was the expression of pAKT and pERK. Contractile dysfunction in the mutant was caused by sarcomeric disorganization, including sparse myofilament, blurred Z-disc, and decreased gene expression for sarcomere modulators (smyd1b, mypn and fhl2a), sarcomeric proteins (myh6, myh7, vmhcl and tnnt2a) and calcium regulators (ryr2b and slc8a1a). Treatment of PI3K activator restored Z-disc alignment while injection of smyd1b mRNA restored Z-disc alignment, contractile function and cardiomyocyte proliferation in ventricles of VCAP1X2 mutant embryos. Furthermore, injection of VCAP1X2 variant mRNA rescued all phenotypes, so long as two cytosolic tyrosines were left intact. Our results reveal two tyrosine residues located in the VCAP1X2 cytoplasmic domain are essential to regulate cardiac contractility and the proliferation of ventricular cardiomyocytes and epicardial cells through modulating pAKT and pERK expression levels.