Mitochondrial morphology is crucial for tissue homeostasis, but its role in cell differentiation is unclear. We found that mitochondrial fusion was required for proper cardiomyocyte development. Ablation of mitochondrial fusion proteins Mitofusin 1 and 2 in the embryonic mouse heart, or gene-trapping of Mitofusin 2 or Optic atrophy 1 in mouse embryonic stem cells (ESCs), arrested mouse heart development and impaired differentiation of ESCs into cardiomyocytes. Gene expression profiling revealed decreased levels of transcription factors transforming growth factor-beta/bone morphogenetic protein, serum response factor, GATA4, and myocyte enhancer factor 2, linked to increased Ca2+-dependent calcineurin activity and Notch1 signaling that impaired ESC differentiation. Orchestration of cardiomyocyte differentiation by mitochondrial morphology reveals how mitochondria, Ca2+, and calcineurin interact to regulate Notch1 signaling.