The epicardium is a sheet of epithelial cells covering the heart during early cardiac development. In recent years, the epicardium has been identified as an important contributor to cardiovascular development, and epicardium-derived cells have the potential to differentiate into multiple cardiac cell lineages. Some epicardium-derived cells that undergo epithelial-to-mesenchymal transition and delaminate from the surface of the developing heart subsequently invade the myocardium and differentiate into vascular smooth muscle of the developing coronary vasculature. MicroRNAs (miRNAs) have been implicated broadly in tissue patterning and development, including in the heart, but a role in epicardium is unknown. To examine the role of miRNAs during epicardial development, we conditionally deleted the miRNA-processing enzyme Dicer in the proepicardium using Gata5-Cre mice. Epicardial Dicer mutant mice are born in expected Mendelian ratios but die immediately after birth with profound cardiac defects, including impaired coronary vessel development. We found that loss of Dicer leads to impaired epicardial epithelial-to-mesenchymal transition and a reduction in epicardial cell proliferation and differentiation into coronary smooth muscle cells. These results demonstrate a critical role for Dicer, and by implication miRNAs, in murine epicardial development.