The venous pole of the mammalian heart is a structurally and electrically complex region, yet the lineage and molecular mechanisms underlying its formation have remained largely unexplored. In contrast to classical studies that attribute the origin of the myocardial sinus horns to the embryonic venous pole, we find that the sinus horns form only after heart looping by differentiation of mesenchymal cells of the septum transversum region into myocardium. The myocardial sinus horns and their mesenchymal precursor cells never express Nkx2–5, a transcription factor critical for heart development. In addition, lineage studies show that the sinus horns do not derive from cells previously positive for Nkx2–5. In contrast, the sinus horns express the T-box transcription factor gene Tbx18. Mice deficient for Tbx18 fail to form sinus horns from the pericardial mesenchyme and have defective caval veins, whereas the pulmonary vein and atrial structures are unaffected. Our studies define a novel heart precursor population that contributes exclusively to the myocardium surrounding the sinus horns or systemic venous tributaries of the developing heart, which are a source of congenital malformation and cardiac arrhythmias.