Cardiac valve formation is a complex process that involves cell signaling events between the myocardial and endocardial layers of the heart across an elaborate extracellular matrix. These signals lead to marked morphogenetic movements and transdifferentiation of the endocardial cells at chamber boundaries. Here we identify the genetic defect in zebrafish jekyll mutants, which are deficient in the initiation of heart valve formation. The jekyll mutation disrupts a homolog of Drosophila Sugarless, a uridine 5'-diphosphate (UDP)-glucose dehydrogenase required for heparan sulfate, chondroitin sulfate, and hyaluronic acid production. The atrioventricular border cells do not differentiate from their neighbors in jekyll mutants, suggesting that Jekyll is required in a cell signaling event that establishes a boundary between the atrium and ventricle.