Self-organisation and coordinated morphogenesis of multiple cardiac lineages is essential for the development and function of the heart1-3. However, the absence of a human in vitro model that mimics the basic lineage architecture of the heart hinders research into developmental mechanisms and congenital defects4. Here, we describe the establishment of a reliable, lineage-controlled and high-throughput cardiac organoid platform. We show that cardiac mesoderm derived from human pluripotent stem cells robustly self-organises and differentiates into cardiomyocytes forming a cavity. Co-differentiation of cardiomyocytes and endothelial cells from cardiac mesoderm within these structures is required to form a separate endothelial layer. As in vivo, the epicardium engulfs these cardiac organoids, migrates into the cardiomyocyte layer and differentiates. We use this model to demonstrate that cardiac cavity formation is controlled by a mesodermal WNT-BMP signalling axis. Disruption of one of the key BMP targets in cardiac mesoderm, the transcription factor HAND1, interferes with cavity formation, which is consistent with its role in early heart tube and left chamber development5. Thus, the cardiac organoid platform represents a powerful resource for the quantitative and mechanistic analysis of early human cardiogenesis and defects that are otherwise inaccessible. Beyond understanding congenital heart disease, cardiac organoids provide a foundation for future translational research into human cardiac disorders.