An important phase of cardiac outflow tract (OFT) formation is the remodeling of the distal region of the common outlet in which the myocardial sleeve is replaced by with smooth muscle. Here we demonstrate that expression of the proteoglycan versican is reduced before the loss of myocardium from the distal cardiac outlet concomitant with an increase in production of the N-terminal cleavage fragment of versican. To test whether versican proteolysis plays a role in OFT remodeling, we determined the effects of adenoviral-mediated expression of a versican isoform devoid of known matrix metalloproteinase cleavage sites (V3) and an N-terminal fragment of versican (G1). V3 expression promoted an increase in thickness of the proximal OFT myocardial layer independent of proliferation. In contrast, the G1 domain caused thinning and interruptions of the OFT myocardium. These in vivo findings were consistent with findings using cultured primary cardiomyocytes showing that the V3 promoted myocardial cell-cell association while the G1 domain caused a loss of myocardial cell-cell association. Taken together, we conclude that intact versican and G1-containing versican cleavage products have opposing effects on myocardial cells and that versican proteolysis may facilitate the loss of distal myocardium during OFT remodeling.