The epicardium – the epithelial layer that covers the heart – plays an essential role in heart development and has been associated with heart regeneration. Understanding how this tissue forms thus has important implications for improving approaches to tackle heart injury. Here, Sanjay Sinha and colleagues report that the transcription factor BNC1 plays a key role in human epicardial development. They first show that, like the murine epicardium, the human epicardium (both foetal heart epicardium and hPSC-derived epicardium, hPSC-epi) exhibits cell heterogeneity. Specifically, using single cell RNA-sequencing they demonstrate that hPSC-epi segregates into two distinct populations that express either BNC1 or another transcription factor, TCF21. The authors further report that TCF21-positive cells express the membrane marker THY1; these THY1-postive cells are able to differentiate into cardiac fibroblasts and smooth muscle cells (SMCs), while THY1-negative cells are restricted to a SMC fate. Finally, the authors use network inference methods to show that BNC1, together with TCF21 and WT1, regulates an epicardial transcriptional network. In line with this, they demonstrate that BNC1 knockdown reduces hPSC-epi heterogeneity and increases the proportion of TCF21-expressing cells. Overall, these findings suggest that BNC1 acts as a master regulator of epicardial development and highlight approaches to generate functionally distinct populations of epicardial cells that can be used for cardiac repair.