We have discovered an unusual homeodomain protein, called HOP, which is comprised simply of a homeodomain. HOP is highly expressed in the developing heart where its expression is dependent on the cardiac-restricted homeodomain protein Nkx2.5. HOP does not bind DNA and acts as an antagonist of serum response factor (SRF), which regulates the opposing processes of proliferation and myogenesis. Mice homozygous for a HOP null allele segregate into two phenotypic classes characterized by an excess or deficiency of cardiac myocytes. We propose that HOP modulates SRF activity during heart development; its absence results in an imbalance between cardiomyocyte proliferation and differentiation with consequent abnormalities in cardiac morphogenesis.