Pacemaker and conduction system myocytes play crucial roles in initiating and regulating the contraction of the cardiac chambers. Genetic defects, acquired diseases, and aging cause dysfunction of the pacemaker and conduction tissues, emphasizing the clinical necessity to understand the molecular and cellular mechanisms of their development and homeostasis. Although all cardiac myocytes of the developing heart initially possess pacemaker properties, the majority differentiates into working myocardium. Only small populations of embryonic myocytes will form the sinus node and the atrioventricular node and bundle. Recent efforts have revealed that the development of these nodal regions is achieved by highly localized suppression of working muscle differentiation, and have identified transcriptional repressors that mediate this process. This review will summarize and reflect new experimental findings on the cellular origin and the molecular control of differentiation and morphogenesis of the pacemaker tissues of the heart. It will also shed light on the etiology of inborn and acquired errors of nodal tissues.