A small network of spontaneously active Tbx3+ cardiomyocytes forms the cardiac conduction system (CCS) of the heart. Understanding the origin and mechanism of development of the CCS network are important steps towards disease modeling and biological pacemaker development to treat arrhythmias. We found that Tbx3 expression already in the embryo associated with automaticity. Genetic inducible fate mapping revealed that Tbx3+ cells in the early heart tube are fated to form the definitive CCS components, except the Purkinje fiber network. At mid-fetal stages contribution of Tbx3+ cells was restricted to the definitive CCS. We identified a Tbx3+ population in the outflow tract of the early heart tube that formed the atrioventricular bundle. While Tbx3+ cardiomyocytes also contributed to the adjacent Gja5+ atrial and ventricular chamber myocardium, embryonic Gja5+ chamber cardiomyocytes did not contribute to the Tbx3+ sinus node or atrioventricular ring bundles. In conclusion, the CCS is established by progressive fate-restriction of a Tbx3+ cell population in the early developing heart, and implicates Tbx3 as a useful tool to develop strategies to study and treat CCS diseases.