Planar cell polarity (PCP) is the mechanism by which cells orient themselves in the plane of an epithelium or during directed cell migration, and is regulated by a highly conserved signalling pathway. Mutations in the PCP gene Vangl2, as well as in other key components of the pathway, cause a spectrum of cardiac outflow tract defects. However, it is unclear why cells within the mesodermal heart tissue require PCP signalling. Using a new conditionally floxed allele we show that Vangl2 is required solely within the second heart field (SHF) to direct normal outflow tract lengthening, a process that is required for septation and normal alignment of the aorta and pulmonary trunk with the ventricular chambers. Analysis of a range of markers of polarised epithelial tissues showed that in the normal heart, undifferentiated SHF cells move from the dorsal pericardial wall into the distal outflow tract where they acquire an epithelial phenotype, before moving proximally where they differentiate into cardiomyocytes. Thus there is a transition zone in the distal outflow tract where SHF cells become more polarised, turn off progenitor markers and start to differentiate to cardiomyocytes. Membrane-bound Vangl2 marks the proximal extent of this transition zone and in the absence of Vangl2, the SHF-derived cells are abnormally polarised and disorganised. The consequent thickening, rather than lengthening, of the outflow wall leads to a shortened outflow tract. Premature down regulation of the SHF-progenitor marker Isl1 in the mutants, and accompanied premature differentiation to cardiomyocytes, suggests that the organisation of the cells within the transition zone is important for maintaining the undifferentiated phenotype. Thus, Vangl2-regulated polarisation and subsequent acquisition of an epithelial phenotype is essential to lengthen the tubular outflow vessel, a process that is essential for on-going cardiac morphogenesis.