Noonan syndrome is one of the most common causes of human congenital heart disease and is frequently associated with missense mutations in the protein phosphatase SHP-2. Interestingly, patients with acute myelogenous leukemia (AML), acute lymphoblastic leukemia (ALL), juvenile myelomonocytic leukemia (JMML) and LEOPARD syndrome frequently carry a second, somatically introduced subset of missense mutations in SHP-2. To determine the cellular and molecular mechanisms by which SHP-2 regulates heart development and, thus, understand how Noonan-associated mutations affect cardiogenesis, we introduced SHP-2 encoding the most prevalent Noonan syndrome and JMML mutations into Xenopus embryos. Resulting embryos show a direct relationship between a Noonan SHP-2 mutation and its ability to cause cardiac defects in Xenopus; embryos expressing Noonan SHP-2 mutations exhibit morphologically abnormal hearts, whereas those expressing an SHP-2 JMML-associated mutation do not. Our studies indicate that the cardiac defects associated with the introduction of the Noonan-associated SHP-2 mutations are coupled with a delay or arrest of the cardiac cell cycle in M-phase and a failure of cardiomyocyte progenitors to incorporate into the developing heart. We show that these defects are a result of an underlying malformation in the formation and polarity of cardiac actin fibers and F-actin deposition. We show that these defects can be rescued in culture and in embryos through the inhibition of the Rho-associated, coiled-coil-containing protein kinase 1 (ROCK), thus demonstrating a direct relationship between SHP-2^N308D and ROCK activation in the developing heart.