Dishevelled-associated activator of morphogenesis 1 (Daam1), a member of the formin protein family, plays an important role in regulating the actin cytoskeleton via mediation of linear actin assembly. Previous functional studies of Daam1 in lower species suggest its essential role in Drosophila trachea formation and Xenopus gastrulation. However, its in vivo physiological function in mammalian systems is largely unknown. We have generated Daam1-deficient mice via gene-trap technology and found that Daam1 is highly expressed in developing murine organs, including the heart. Daam1-deficient mice exhibit embryonic and neonatal lethality and suffer multiple cardiac defects, including ventricular noncompaction, double outlet right ventricles and ventricular septal defects. In vivo genetic rescue experiments further confirm that the lethality of Daam1-deficient mice results from the inherent cardiac abnormalities. In-depth analyses have revealed that Daam1 is important for regulating filamentous actin assembly and organization, and consequently for cytoskeletal function in cardiomyocytes, which contributes to proper heart morphogenesis. Daam1 is also found to be important for proper cytoskeletal architecture and functionalities in embryonic fibroblasts. Biochemical analyses indicate that Daam1 does not regulate cytoskeletal organization through RhoA, Rac1 or Cdc42. Our study highlights a crucial role for Daam1 in regulating the actin cytoskeleton and tissue morphogenesis.