The surface instability, dynamics, morphology, and spontaneous dewetting of a thin liquid film on chemically heterogeneous substrates are studied on the basis of 3D nonlinear simulations. A new mechanism of dewetting in the presence of heterogeneity is proposed where the instability is engendered by the gradient of intermolecular interactions that lead to a microscale wettability contrast. The time scale of instability, which can be several orders smaller than the spinodal dewetting time scale on homogeneous surfaces, varies inversely with the potential difference induced by the heterogeneity. Heterogeneity can even destabilize spinodally stable films, reduce the time of rupture substantially for thicker films, and decrease the dependence of rupture time on the film thickness. The presence of heterogeneity produces complex and locally ordered morphological features that are not predicted by the spinodal dewetting, for example "ripples" and "castle-moat" structures, radially symmetric structures, and a lack of undulations before the birth of a hole. The precise morphological pattern selection depends on the size of the heterogeneity, the potential difference caused by the heterogeneity, the film thickness, and also the spinodal characteristics of the substrate: The resulting morphologies can be understood on the basis of simple arguments that consider interplay among these factors.