The cardiac T-box transcription factor TBX5 is crucial for proper cardiovascular development, and mutations in TBX5 have been associated with various congenital heart diseases and arrhythmias in humans. However, whether mutated TBX5 contributes to dilated cardiomyopathy (DCM) remains unclear. In this study, the coding exons and flanking introns of the TBX5 gene were sequenced in 190 unrelated patients with idiopathic DCM. The available family members of the index patient carrying an identified mutation and 200 unrelated ethnically matched healthy individuals used as controls were genotyped for TBX5. The functional characteristics of the mutant TBX5 were explored in contrast to its wild-type counterpart by using a dual-luciferase reporter assay system. As a result, a novel heterozygous TBX5 mutation, p.S154A, was identified in a family with DCM inherited in an autosomal dominant pattern, which co-segregated with DCM in the family with complete penetrance. The missense mutation was absent in 400 control chromosomes and the altered amino acid was completely conserved evolutionarily across various species. Functional assays revealed that the mutant TBX5 had significantly decreased transcriptional activity. Furthermore, the mutation markedly diminished the synergistic activation of TBX5 with NKX2-5 or GATA4, other two transcription factors causatively linked to DCM. This study firstly associates TBX5 loss-of-function mutation with enhanced susceptibility to DCM, providing novel insight into the molecular mechanisms of DCM, and suggesting the potential implications in the development of new treatment strategies for this common form of myocardial disorder.