The T-box transcription factors play critical roles in embryonic development including cell type specification, tissue patterning, and morphogenesis. Several T-box genes are expressed in the heart and are regulators of cardiac development. At the earliest stages of heart development, two of these genes, Tbx5 and Tbx20, are co-expressed in the heart-forming region but then become differentially expressed as heart morphogenesis progresses. Although Tbx5 and Tbx20 belong to the same gene family and share a highly conserved DNA-binding domain, their transcriptional activities are distinct. The C-terminal region of the Tbx5 protein is a transcriptional activator, while the C terminus of Tbx20 can repress transcription. Tbx5, but not Tbx20, activates a cardiac-specific promoter (atrial natriuretic factor (ANF)) alone and synergistically with other transcription factors. In contrast, Tbx20 represses ANF promoter activity and also inhibits the activation mediated by Tbx5. Of the two T-box binding consensus sequences in the promoter of ANF, only T-box binding element 1 (TBE1) is required for the synergistic activation of ANF by Tbx5 and GATA4, but TBE2 is required for repression by Tbx20. To elucidate upstream signaling pathways that regulate Tbx5 and Tbx20 expression, recombinant bone morphogenetic protein-2 was added to cardiogenic explants from chick embryos. Using real time reverse transcription-PCR, it was demonstrated that Tbx20, but not Tbx5, is induced by bone morphogenetic protein-2. Collectively these data demonstrate clear differences in both the expression and function of two related transcription factors and suggest that the modulation of cardiac gene expression can occur as a result of combinatorial regulatory interactions of T-box proteins.