Ring1 and Yy1 binding protein (Rybp) has been implicated in transcriptional regulation, apoptotic signaling and as a member of the polycomb repressive complex 1, it has an important function in regulating pluripotency and differentiation of embryonic stem cells (ESCs). Earlier, we had proved that Rybp plays an essential role in mouse embryonic and central nervous system development. This work identifies Rybp, as a critical regulator of heart development. Rybp is readily detectable in the developing mouse heart from day 8.5 of embryonic development. Prominent Rybp expression persists during all embryonic stages, and Rybp marks differentiated cell types of the heart. By utilizing rybp null ESCs in an in vitro cardiac differentiation assay, we found that rybp null ESCs do not form rhythmically beating cardiomyocytes (CMCs). Gene expression profiles revealed a downregulation of cardiac terminal and upregulation of germline-specific markers in the rybp null CMCs. Furthermore, transcriptome analysis uncovered a number of novel candidate target genes regulated by Rybp. Among these are several that are important in cardiac development and contractility such as Plagl1, Isl1, and Tnnt2. Importantly, forced expression of rybp in rybp-deficient ESCs by a lentiviral vector was able to rescue the mutant phenotype. Our data provide evidence for a previously unrecognized function of Rybp in heart development and point out the importance of germ cell lineage gene silencing during somatic differentiation.