Adult zebrafish possess a remarkable capacity for cardiac regeneration without significant scarring. The epicardium, a mesothelial cell layer enveloping the heart, is activated by cardiac injury and enables new muscle regeneration through paracrine effects and as a multipotent cell source. Recent work revealed that the epicardium is highly regenerative, and that its presence is required for muscle regeneration. Yet, the cellular and molecular mechanisms by which epicardial cells respond to cardiac injury require elucidation. In this study, we created a panel of transgenic lines employing tcf21 regulatory sequences to visualize subcellular components (LifeAct-EGFP, Histone H2A-EGFP) and cell cycle phases (FUCCI) within epicardial cells. Combining these reagents with an ex vivo system for live imaging of epicardial regeneration, we found that endoreplication and hypertrophy are prominent in cells at the leading edge of the regenerating epicardial sheet. By contrast, epicardial cells in the lagging regions complete cytokinesis and are responsible for increased cell density. Endoreplication (including both endocycling and endomitosis), but not cell fusion, leads to hypertrophic epicardial cells. These cells are further eliminated through apoptosis after full recovery of the ventricular epicardium. Through chemical screening we found that inhibition of Tgf-beta signaling blocked epicardial cell proliferation, led to smaller numbers of cells and higher incidence of hypertrophy, suggesting a key role in balancing sheet dynamics. Our findings indicate an unexpected role for endoreplication and hypertrophy in regeneration of the cardiac mesothelium.