PICOT (PKC-interacting cousin of thioredoxin) was previously shown to inhibit the development of cardiac hypertrophy, concomitant with an increase in cardiomyocyte contractility. To explore the physiological function of PICOT in the hearts, we generated a PICOT-deficient mouse line by using a gene trap approach. PICOT^−/− mice were embryonic lethal indicating that PICOT plays an essential role during embryogenesis, whereas PICOT^+/− mice were viable with no apparent morphological defects. The PICOT protein levels were reduced by about 50% in the hearts of PICOT^+/− mice. Significantly exacerbated cardiac hypertrophy was induced by pressure overload in PICOT^+/− mice relative to that seen in wild type littermates. In line with this observation, calcineurin-NFAT signaling was greatly enhanced by pressure overload in the hearts of PICOT^+/− mice. Cardiomyocytes from PICOT^+/− mice exhibited significantly reduced contractility, which may be due in part to hypophosphorylation of phospholamban and reduced SERCA activity. These data indicate that the precise PICOT protein level significantly affects the process of cardiac hypertrophy and cardiomyocyte contractility. We suggest that PICOT plays as a critical negative regulator of cardiac hypertrophy and a positive inotropic regulator.