In response to cardiac damage, a mesothelial tissue layer enveloping the heart called the epicardium is activated to proliferate and accumulate at the injury site. Recent studies have implicated the epicardium in multiple aspects of cardiac repair: as a source of paracrine signals for cardiomyocyte survival or proliferation; a supply of perivascular cells and possibly other cell types such as cardiomyocytes; and as a mediator of inflammation. However, the biology and dynamism of the adult epicardium is poorly understood. To investigate this, we created a transgenic line to ablate the epicardial cell population in adult zebrafish. Here we find that genetic depletion of the epicardium after myocardial loss inhibits cardiomyocyte proliferation and delays muscle regeneration. The epicardium vigorously regenerates after its ablation, through proliferation and migration of spared epicardial cells as a sheet to cover the exposed ventricular surface in a wave from the chamber base towards its apex. By reconstituting epicardial regeneration ex vivo, we show that extirpation of the bulbous arteriosus-a distinct, smooth-muscle-rich tissue structure that distributes outflow from the ventricle-prevents epicardial regeneration. Conversely, experimental repositioning of the bulbous arteriosus by tissue recombination initiates epicardial regeneration and can govern its direction. Hedgehog (Hh) ligand is expressed in the bulbous arteriosus, and treatment with a Hh signalling antagonist arrests epicardial regeneration and blunts the epicardial response to muscle injury. Transplantation of Sonic hedgehog (Shh)-soaked beads at the ventricular base stimulates epicardial regeneration after bulbous arteriosus removal, indicating that Hh signalling can substitute for the influence of the outflow tract. Thus, the ventricular epicardium has pronounced regenerative capacity, regulated by the neighbouring cardiac outflow tract and Hh signalling. These findings extend our understanding of tissue interactions during regeneration and have implications for mobilizing epicardial cells for therapeutic heart repair.