Organogenesis involves integration of myriad cell types with reciprocal interactions, each progressing through successive stages of lineage specification and differentiation. Establishment of unique gene networks within each cell dictates fate determination, and mutations of transcription factors that drive such networks can result in birth defects. Congenital heart defects are the most common malformations and are caused by disruption of discrete subsets of progenitors1–3, however, determining the transcriptional changes in individual cells that lead to organ-level defects in the heart, or other organs, has not been tractable. Here, we employed single-cell RNA sequencing to interrogate early cardiac progenitor cells as they become specified during normal and abnormal cardiogenesis, revealing how dysregulation of specific cellular sub-populations can have catastrophic consequences. A network-based computational method for single-cell RNA-sequencing that predicts lineage specifying transcription factors4,5 identified Hand2 as a specifier of outflow tract cells but not right ventricular cells, despite failure of right ventricular formation in Hand2-null mice6. Temporal single-cell transcriptome analysis of Hand2-null embryos revealed failure of outflow tract myocardium specification, whereas right ventricular myocardium differentiated but failed to migrate into the anterior pole of the developing heart. Dysregulation of retinoic acid signaling, responsible for anterior-posterior patterning7, was associated with posteriorization of anterior cardiac progenitors in Hand2-null mutant hearts and ectopic atrial gene expression in outflow tract and right ventricle precursors. This work reveals transcriptional determinants in individual cells that specify cardiac progenitor cell fate and differentiation and exposes mechanisms of disrupted cardiac development at single-cell resolution, providing a framework to investigate congenital heart defects.