In the developing heart, the epicardium is essential for coronary vasculogenesis as it provides precursor cells that become coronary vascular smooth muscle and perivascular fibroblasts. These precursor cells are derived from the epicardium via epithelial–mesenchymal transformation (EMT). The factors that regulate epicardial EMT are unknown. Using a quantitative in vitro collagen gel assay, we show that serum, FGF-1, -2, and -7, VEGF, and EGF stimulate epicardial EMT. TGFβ-1 stimulates EMT only weakly, while TGFβ-2 and -3 do not stimulate EMT. TGFβ-1, -2, or -3 strongly inhibits transformation of epicardial cells stimulated with FGF-2 or heart-conditioned medium. TGFβ-3 does not block expression of vimentin, a mesenchymal marker, but appears to inhibit EMT by blocking epithelial cell dissociation and subsequent extracellular matrix invasion. Blocking antisera directed against FGF-1, -2, or -7 substantially inhibit conditioned medium-stimulated EMT in vitro, while antibodies to TGFβ-1, -2, or -3 increase it. We confirmed FGF stimulation and TGFβ inhibition of epicardial EMT in organ culture. Immunoblot analysis confirmed the presence of FGF-1, -2, and -7 and TGFβ-1, -2, and -3 in conditioned medium, and we localized these growth factors to the myocardium and epicardium of stage-appropriate embryos by immunofluorescence. Our results strongly support a model in which myocardially derived FGF-1, -2, or -7 promotes epicardial EMT, while TGFβ-1, -2, or -3 restrains it. Epicardial EMT appears to be regulated through a different signaling pathway than endocardial EMT.