Establishment of anteroposterior (AP) polarity is one of the earliest decisions in cardiogenesis and plays an important role in the coupling between heart and blood vessels. Recent research implicated retinoic acid (RA) in the communication of AP polarity to the heart. We utilized embryo culture, in situ hybridization, morphometry, fate mapping and treatment with the RA pan-antagonist BMS493 to investigate the relationship between cardiac precursors and RA signalling. We describe two phases of AP signalling by RA, reflected in RALDH2 expression. The first phase (HH4-7) is characterized by increasing proximity between sino-atrial precursors and the lateral mesoderm expressing RALDH2. In this phase, RA signalling is consistent with diffusion of the morphogen from a large field rather than a single hot spot. The second phase (HH7-8) is characterized by progressive encircling of cardiac precursors by a field of RALDH2 originating from a dynamic and evolutionary-conserved caudorostral wave pattern in the lateral mesoderm. At this phase, cardiac AP patterning by RA is consistent with localized action of RA by regulated activation of the Raldh2 gene within an embryonic domain. Systemic treatment with BMS493 altered the cardiac fate map such that ventricular precursors were found in areas normally devoid of them. Topical application of BMS493 inhibited atrial differentiation in left anterior lateral mesoderm. Identification of the caudorostral wave of RALDH2 as the endogenous source of RA establishing cardiac AP fates provides a useful model to approach the mechanisms whereby the vertebrate embryo confers axial information on its organs.