Congenital heart defects affect almost 1\% of human newborns. Recently, mutations in Notch ligands and receptors have been found to cause a variety of heart defects in rodents and humans. However, the molecular effects downstream of Notch are still poorly understood. Here we report that combined inactivation of Hey1 and HeyL, two primary target genes of Notch, causes severe heart malformations, including membranous ventricular septal defects and dysplastic atrioventricular and pulmonary valves. These defects lead to congestive cardiac failure with high lethality. We found both genes to be coexpressed with Notch1, Notch2 and the Notch ligand Jagged1 in the endocardium of the atrioventricular canal, representing the primary source of mesenchymal cells forming membraneous septum and valves. Atrioventricular explants from Hey1/HeyL deficient mice exhibited impaired epithelial to mesenchymal transition. Although epithelial to mesenchymal transition was initiated regularly, full transformation into mesenchymal cells failed. This was accompanied by reduced levels of matrix metalloproteinase-2 expression and reduced cell density in endocardial cushions in vivo. We further show that loss of Hey2 leads to very similar deficiencies, whereas a Notch1 null mutation completely abolishes epithelial to mesenchymal transition. Thus, the Hey gene family shows overlap in controlling Notch induced endocardial epithelial to mesenchymal transition, a process critical for valve and septum formation.