Cells of the coronary vessels arise from a unique extracardiac mesothelial cell population, the proepicardium, which develops posterior to the sinoatrial region of the looping-stage heart. Although contribution of the proepicardial cells to cardiac development has been studied extensively, it remains unresolved how the proepicardium is induced and specified in the mesoderm during embryogenesis. It is known, however, that the proepicardium develops from the mesothelium that overlays the liver bud. Here, we show that the expression of proepicardial marker genes - Wt1, capsulin (epicardin, pod1, Tcf21) and Tbx18, can be induced in naïve mesothelial cells by the liver bud, both in vitro and in vivo. Lateral embryonic explants, when co-cultured with the liver bud, were induced to express these proepicardial marker genes. The same induction of the marker genes was detected in vivo when a quail liver bud was implanted in the posterior-lateral regions of a chick embryo. This ectopic induction of marker gene expression was not evident when other endodermal tissues, such as the lung bud or stomach, were implanted. This inductive response to the liver bud was not detectable in host embryos before stage 12 (16-somite stage). These results suggest that, after a specific developmental stage, a large area of the mesothelium becomes competent to express proepicardial marker genes in response to localized liver-derived signal(s). The developmentally regulated competency of mesothelium and a localized inductive signal might play a role in restricting the induction of the proepicardial marker gene expression to a specific region of the mesothelium. The data might also provide a foundation for future engineering of a coronary vascular progenitor population.