It has been proposed that cardiac development in lower vertebrates is driven by the proliferation of cardiomyocytes. Similarly, cycling myocytes have been suggested to direct cardiac regeneration in neonatal mice after injury. Although, the role of cardiomyocyte proliferation in cardiac tissue generation during development has been well documented, the extent of this contribution as well as the role of other cell types, such as progenitor cells, still remains controversial. Here we used a novel stochastic four-color Cre-dependent reporter system (Rainbow) that allows labeling at a single cell level and retrospective analysis of the progeny. Cardiac progenitors expressing Mesp1 or Nkx2.5 were shown to be a source of cardiomyocytes during embryonic development while the onset of αMHC expression marked the developmental stage where the capacity of cardiac cells to proliferate diminishes significantly. Through direct clonal analysis we provide strong evidence supporting that cardiac progenitors, as opposed to mature cardiomyocytes, are the main source of cardiomyocytes during cardiac development. Moreover, we have identified quadri-, tri-, bi, and uni-potent progenitors that at a single cell level can generate cardiomyocytes, fibroblasts, endothelial and smooth muscle cells. Although existing cardiomyocytes undergo limited proliferation, our data indicates that it is mainly the progenitors that contribute to heart development. Furthermore, we show that the limited proliferation capacity of cardiomyocytes observed during normal development was enhanced following neonatal cardiac injury allowing almost complete regeneration of the scared tissue. However, this ability was largely absent in adult injured hearts. Detailed characterization of dividing cardiomyocytes and proliferating progenitors would greatly benefit the development of novel therapeutic options for cardiovascular diseases.