Retinoic acid (RA), the active derivative of vitamin A, has been implicated in various steps of cardiovascular development, but its contribution to early heart morphogenesis has not been clearly established in a mammalian system. To block endogenous RA synthesis, we have disrupted the gene encoding RALDH2, the first retinaldehyde dehydrogenase whose expression has been detected during early mouse post-implantation development. We describe here the heart abnormalities of the RA-deficient Raldh2 mutants that die in utero at gestational day 10.5. The embryonic heart tube forms properly, but fails to undergo rightward looping and, instead, forms a medial distended cavity. Expression of early heart determination factors is not altered in mutants, and the defect in heart looping does not appear to involve the Nodal/Lefty/Pitx2 pathway. Histological and molecular analysis reveal distinct anteroposterior components in the mutant heart tube, although posterior chamber (atria and sinus venosus) development is severely impaired. Instead of forming trabeculae, the developing ventricular myocardium consists of a thick layer of loosely attached cells. Ultrastructural analysis shows that most of the ventricular wall consists of prematurely differentiated cardiomyocytes, whereas undifferentiated cells remain clustered rostrally. We conclude that embryonic RA synthesis is required for realization of heart looping, development of posterior chambers and proper differentiation of ventricular cardiomyocytes. Nevertheless, the precise location of this synthesis may not be crucial, as these defects can mostly be rescued by systemic (maternal) RA administration. However, cardiac neural crest cells cannot be properly rescued in Raldh2^{− /−} embryos, leading to outflow tract septation defects.