Septation of the mammalian heart into four chambers requires the orchestration of multiple tissue progenitors. Abnormalities in this process can result in potentially fatal atrioventricular septation defects (AVSD). The contribution of extracardiac cells to atrial septation has recently been recognized. Here, we use a genetic marker and novel magnetic resonance microscopy techniques to demonstrate the origins of the dorsal mesenchymal protrusion in the dorsal mesocardium, and its substantial contribution to atrioventricular septation. We explore the functional significance of this tissue to atrioventricular septation through study of the previously uncharacterized AVSD phenotype of Shh(-/-) mutant mouse embryos. We demonstrate that Shh signaling is required within the dorsal mesocardium for its contribution to the atria. Failure of this addition results in severe AVSD. These studies demonstrate that AVSD can result from a primary defect in dorsal mesocardium, providing a new paradigm for the understanding of human AVSD.