Congenital heart disease (CHD) is an enigma. It is the most common human birth defect and yet, even with the application of modern genetic and genomic technologies, only a minority of cases can be explained genetically. This is because environmental stressors also cause CHD. Here we propose a plausible non-genetic mechanism for induction of CHD by environmental stressors. We show that exposure of mouse embryos to short-term gestational hypoxia induces the most common types of heart defect. This is mediated by the rapid induction of the unfolded protein response (UPR), which profoundly reduces FGF signaling in cardiac progenitor cells of the second heart field. Thus, UPR activation during human pregnancy might be a common cause of CHD. Our findings have far-reaching consequences because the UPR is activated by a myriad of environmental or pathophysiological conditions. Ultimately, our discovery could lead to preventative strategies to reduce the incidence of human CHD.