Epicardial cells are cardiac progenitors that give rise to the majority of cardiac fibroblasts, coronary smooth muscle cells, and pericytes during development. An integral phase of epicardial fate transition is epithelial-to-mesenchymal transition (EMT) that confers motility. We uncover an essential role for the protein arginine methyltransferase 1 (PRMT1) in epicardial invasion and differentiation. Using scRNA-seq, we show that epicardial-specific deletion of Prmt1 reduced matrix and ribosomal gene expression in epicardial-derived cell lineages. PRMT1 regulates splicing of Mdm4, which is a key controller of p53 stability. Loss of PRMT1 leads to accumulation of p53 that enhances Slug degradation and blocks EMT. During heart development, the PRMT1-p53 pathway is required for epicardial invasion and formation of epicardial-derived lineages: cardiac fibroblasts, coronary smooth muscle cells, and pericytes. Consequently, this pathway modulates ventricular morphogenesis and coronary vessel formation. Altogether, our study reveals molecular mechanisms involving the PRMT1-p53 pathway and establish its roles in heart development.