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Glycosaminoglycans are important regulators of multiple signaling pathways. As a major constituent of the heart extracellular matrix, glycosaminoglycans are implicated in cardiac morphogenesis through interactions with different signaling morphogens. Ext1 is a glycosyltransferase responsible for heparan sulfate synthesis. Here, we evaluate the function of Ext1 in heart development by analyzing Ext1 hypomorphic mutant and conditional knockout mice. Outflow tract alignment is sensitive to the dosage of Ext1. Deletion of Ext1 in the mesoderm induces a cardiac phenotype similar to that of a mutant with conditional deletion of UDP-glucose dehydrogenase, a key enzyme responsible for synthesis of all glycosaminoglycans. The outflow tract defect in conditional Ext1 knockout(Ext1f/f:Mesp1Cre) mice is attributable to the reduced contribution of second heart field and neural crest cells. Ext1 deletion leads to downregulation of FGF signaling in the pharyngeal mesoderm. Exogenous FGF8 ameliorates the defects in the outflow tract and pharyngeal explants. In addition, Ext1 expression in second heart field and neural crest cells is required for outflow tract remodeling. Our results collectively indicate that Ext1 is crucial for outflow tract formation in distinct progenitor cells, and heparan sulfate modulates FGF signaling during early heart development.