Background: Initial specification of cardiomyocytes in the mouse results from interactions between the extraembryonic anterior visceral endoderm (AVE) and the nascent mesoderm. However the mechanism by which AVE activates cardiogenesis is not well understood, and the identity of specific cardiogenic factors in the endoderm remains elusive. Most mammalian studies of the cardiogenic potential of the endoderm have relied on the use of cell lines that are similar to the heart-inducing AVE. These include the embryonal-carcinoma-derived cell lines, END2 and PYS2. The recent development of protocols to isolate eXtraembryonic ENdoderm (XEN) stem cells, representing the extraembryonic endoderm lineage, from blastocyst stage mouse embryos offers new tools for the genetic dissection of cardiogenesis. Methodology/Principal Findings: Here, we demonstrate that XEN cell-conditioned media (CM) enhances cardiogenesis during Embryoid Body (EB) differentiation of mouse embryonic stem (ES) cells in a manner comparable to PYS2-CM and END2-CM. Addition of CM from each of these three cell lines enhanced the percentage of EBs that formed beating areas, but ultimately, only XEN-CM and PYS2-CM increased the total number of cardiomyocytes that formed. Furthermore, our observations revealed that both contact-independent and contact-dependent factors are required to mediate the full cardiogenic potential of the endoderm. Finally, we used gene array comparison to identify factors in these cell lines that could mediate their cardiogenic potential. Conclusions/Significance: These studies represent the first step in the use of XEN cells as a molecular genetic tool to study cardiomyocyte differentiation. Not only are XEN cells functionally similar to the heart-inducing AVE, but also can be used for the genetic dissection of the cardiogenic potential of AVE, since they can be isolated from both wild type and mutant blastocysts. These studies further demonstrate the importance of both contact-dependent and contact-independent factors in cardiogenesis and identify potential heart-inducing proteins in the endoderm.