Tbx20 is a T-box transcription factor that plays essential roles in the development and maintenance of the heart. Although it is expressed by cardiac progenitors in all species examined, an involvement of Tbx20 in cardiac progenitor formation in vertebrates has not been previously described. Here we report the identification of a zebrafish tbx20 mutation that results in an inactive, truncated protein lacking any functional domains. The cardiac progenitor population is strongly diminished in this mutant, leading to the formation of a small, stretched-out heart. We found that overexpression of Tbx20 results in an enlarged heart with significantly more cardiomyocytes. Interestingly, this increase in cell number is caused by both enhanced cardiac progenitor cell formation and the proliferation of differentiated cardiomyocytes, and is dependent upon the activity of Tbx20's T-box and transcription activation domains. Together, our findings highlight a previously unappreciated role for Tbx20 in promoting cardiac progenitor formation in vertebrates and reveal a novel function for its activation domain in cardiac cell proliferation during embryogenesis.