The possibility of using cell-based therapeutics to treat cardiac failure has generated significant interest since the initial introduction of stem cell-based technologies. However, the methods to quickly and robustly direct stem cell differentiation towards cardiac cell types have been limited by a reliance on recombinant growth factors to provide necessary biological cues. We report here the use of dorsomorphin homologue 1 (DMH1), a second-generation small molecule BMP inhibitor based on dorsomorphin, to efficiently induce beating cardiomyocyte formation in mouse embryonic stem cells (ESCs) and to specifically upregulate canonical transcriptional markers associated with cardiac development. DMH1 differs significantly from its predecessor by its ability to enrich for pro-cardiac progenitor cells that respond to late-stage Wnt inhibition using XAV939 and produce secondary beating cardiomyocytes. Our study demonstrates the utility of small molecules to complement existing in vitro cardiac differentiation protocols and highlights the role of transient BMP inhibition in cardiomyogenesis.