BACKGROUND Pluripotent embryonic stem (ES) cells, which have the capacity to give rise to all tissue types in the body, show great promise as a versatile source of cells for regenerative therapy. However, the basic mechanisms of lineage specification of pluripotent stem cells are largely unknown, and generating sufficient quantities of desired cell types remains a formidable challenge. Small molecules, particularly those that modulate key developmental pathways like the bone morphogenetic protein (BMP) signaling cascade, hold promise as tools to study in vitro lineage specification and to direct differentiation of stem cells toward particular cell types. METHODOLOGY/ PRINCIPAL FINDINGS We describe the use of dorsomorphin, a selective small molecule inhibitor of BMP signaling, to induce myocardial differentiation in mouse ES cells. Cardiac induction is very robust, increasing the yield of spontaneously beating cardiomyocytes by at least 20 fold. Dorsomorphin, unlike the endogenous BMP antagonist Noggin, robustly induces cardiomyogenesis when treatment is limited to the initial 24-hours of ES cell differentiation. Quantitative-PCR analyses of differentiating ES cells indicate that pharmacological inhibition of BMP signaling during the early critical stage promotes the development of the cardiomyocyte lineage, but reduces the differentiation of endothelial, smooth muscle, and hematopoietic cells. CONCLUSIONS/ SIGNIFICANCE Administration of a selective small molecule BMP inhibitor during the initial stages of ES cell differentiation substantially promotes the differentiation of primitive pluripotent cells toward the cardiomyocytic lineage, apparently at the expense of other mesodermal lineages. Small molecule modulators of developmental pathways like dorsomorphin could become versatile pharmacological tools for stem cell research and regenerative medicine.