The T-box transcription factor TBX1 has critical roles in maintaining proliferation and inhibiting differentiation of cardiac progenitor cells of the second heart field (SHF). Haploinsufficiency of the gene that encodes it is a cause of congenital heart disease. Here, we developed an embryonic stem (ES) cell-based model in which Tbx1 expression can be modulated by tetracycline. Using this model, we found that TBX1 down regulates the expression of VEGFR2, and we confirmed this finding in vivo during embryonic development. In addition, we found a Vegfr2 domain of expression, not previously described, in the posterior SHF and this expression is extended by loss of Tbx1. VEGFR2 has been previously described as a marker of a subpopulation of cardiac progenitors. Clonal analysis of ES-derived VEGFR2+ cells indicated that 12.5% of clones expressed three markers of cardiac lineage (cardiomyocyte, smooth muscle and endothelium). However, a pulse of Tbx1 expression was sufficient to increase the percentage to 20.8%. In addition, the percentage of clones expressing markers of multiple cardiac lineages increased from 41.6% to 79.1% after Tbx1 pulse. These results suggest that TBX1 plays a role in maintaining a progenitor state in VEGFR2+ cells.