Conotruncal and ventricular septal congenital heart anomalies result from defects in formation and division of the embryonic outflow tract. Cardiac remodeling during outflow tract and ventricular septation converts the tubular embryonic heart into a parallel circulatory system with an independent left ventricular outlet and right ventricular inlet. Tbx3 encodes a T-box–containing transcription factor expressed in the developing conduction system of the heart. Mutations in TBX3 cause ulnar–mammary syndrome. Here we show that mice lacking Tbx3 develop severe outflow tract defects, including connection of both the aorta and pulmonary trunk with the right ventricle, in addition to aortic arch artery anomalies, and abnormal communication between the right atrium and left ventricle. Alignment defects are preceded by a delay in caudal displacement of the arterial pole during aortic arch artery formation. Embryonic anterior–posterior patterning and cardiac chamber development are unaffected in Tbx3 mutant embryos. However, the contribution of second heart field derived progenitor cells to the arterial pole of the heart is impaired. Tbx3 is expressed in pharyngeal epithelia and neural crest cells in the pharyngeal region, suggesting an indirect role in second heart field deployment. Loss of Tbx3 affects multiple signaling pathways regulating second heart field proliferation and outflow tract morphogenesis, including fibroblast growth factor signaling, leading to a failure of normal heart tube extension and consequent atrioventricular and ventriculoarterial alignment defects.