Conditions that cause pacemaker formation in the developing heart are poorly understood. Embryonic rat myocardium grafted into the anterior eye chamber of an adult rat provides a promising model system in which to study pacemaker development. Electrophysiologic mapping with two microelectrodes showed that each embryonic heart graft developed a primary pacemaker within the region of contact with the host iris. These single, primary pacemakers were found in the centers of graft-iris junctions both in grafts that originally contained the natural pacemaker (e.g. right atria and whole hearts) and in grafts that excluded the sinoatrial pacemaker region (i.e. ventricles and left atrial appendages). Pacemaker action potentials were recorded in the region identified by mapping as the origin of the impulse in 11 of 11 grafts. Action potentials recorded from surrounding working cells were similar to adult rat heart cells in maximum diastolic potential, overshoot, amplitude, and duration. In contrast, maximum upstroke velocity was consistently slower in grafts than in adult hearts. Beating of grafts slowed or stopped within 3 days after transplantation but resumed by 10-14 days at rates similar to those observed before dissection (265 ± 12), a pattern consistent with development of a new pacemaker in oculo. The graft-iris junction is the site of blood vessel and nerve ingrowth into the graft and it is a region of contact between differentiated embryonic myocardial cells and nonmyocardial (iris epithelial) cells. The roles of these three factors (vascularization, innervation, and surface contact) in establishing the pacemaker were examined using embryonic heart cultured both in the anterior eye chamber and in vitro. © 1988 International Pediatrics Research Foundation, Inc.