Abstract: The evidence of cardiomyocyte proliferation in damaged heart implied cardiac regeneration might occur by resident or extra cardiac stem cells. However, the specification and origin of these cells remain unknown. Here, we report using fluorescence‐activated cell sorting that cardiac progenitor cells resided in adult heart and colocalized with small capillary vessels, within the stem cell antigen (Sca‐1) population expressing high telomerase activity. Notably, hematopoietic stem cells capable of efflux Hoechst 33342, termed side population cells, also were identified within the heart‐derived cells. The cardiac progenitor cells (CD45⁻/CD34⁻) express neither cardiac muscle nor endothelial cell markers at an undifferentiated stage. The exposure of 5‐azacytidine induced cardiac differentiation, which depends, in part, on Bmpr1a, a type IA receptor for bone morphogenetic protein (BMP). The capability of adult Sca1⁺ cells to adopt a cardiac muscle in embryogenesis was substantiated by blastocyst injection, using progenitors from the adult hearts of transgenic mice that harbor a bacterial artificial chromosome expressing GFP via the Nkx‐2.5 locus. Intravenously injected progenitors, shortly after ischemic/reperfusion, homed and functionally differentiated 3.5% of total left ventricle in the host myocardium. Differentiation included both fusion‐independent and fusion‐associated components, proved by the Cre/loxP donor/recipient system. Our studies suggest that endogenous cardiac progenitors reside in the adult heart, regenerate cardiomyocytes functionally, and integrate into the existing heart circuitry.