The specification of an appropriate number of cardiomyocytes from the lateral plate mesoderm requires a careful balance of both positive and negative regulatory signals. To identify new regulators of cardiac specification, we performed a phenotype-driven ENU mutagenesis forward genetic screen in zebrafish. In our genetic screen we identified a zebrafish ctr9 mutant with a dramatic reduction in myocardial cell number as well as later defects in primitive heart tube elongation and atrioventricular boundary patterning. Ctr9, together with Paf1, Cdc73, Rtf1 and Leo1, constitutes the RNA polymerase II associated protein complex, PAF1. We demonstrate that the PAF1 complex (PAF1C) is structurally conserved among zebrafish and other metazoans and that loss of any one of the components of the PAF1C results in abnormal development of the atrioventricular boundary of the heart. However, Ctr9, Cdc73, Paf1 and Rtf1, but not Leo1, are required for the specification of an appropriate number of cardiomyocytes and elongation of the heart tube. Interestingly, loss of Rtf1 function produced the most severe defects, resulting in a nearly complete absence of cardiac precursors. Based on gene expression analyses and transplantation studies, we found that the PAF1C regulates the developmental potential of the lateral plate mesoderm and is required cell autonomously for the specification of cardiac precursors. Our findings demonstrate critical but differential requirements for PAF1C components in zebrafish cardiac specification and heart morphogenesis.