Dysmorphogenesis of the cardiac outflow tract (OFT) causes many congenital heart defects, including those associated with DiGeorge syndrome. Genetic manipulation in the mouse and mutational analysis in patients have shown that Tbx1, a T-box transcription factor, has a key role in the pathogenesis of this syndrome. Here, we have dissected Tbx1 function during OFT development using genetically modified mice and tissue-specific deletion, and have defined a dual role for this protein in OFT morphogenesis. We show that Tbx1 regulates cell contribution to the OFT by supporting cell proliferation in the secondary heart field, a source of cells fated to the OFT. This process might be regulated in part by Fgf10, which we show for the first time to be a direct target of Tbx1 in vitro. We also show that Tbx1 expression is required in cells expressing Nkx2.5 for the formation of the aorto-pulmonary septum, which divides the aorta from the main pulmonary artery. These results explain why aortic arch patterning defects and OFT defects can occur independently in individuals with DiGeorge syndrome. Furthermore, our data link, for the first time, the function of the secondary heart field to congenital heart disease.