Background: Genetic variation is an important determinant of RNA transcription and splicing, which in turn contributes to variation in human traits, including cardiovascular diseases. Results: Here we report the first in-depth survey of heart transcriptome variation using RNA-sequencing in 97 patients with dilated cardiomyopathy and 108 non-diseased controls. We reveal extensive differences of gene expression and splicing between dilated cardiomyopathy patients and controls, affecting known as well as novel dilated cardiomyopathy genes. Moreover, we show a widespread effect of genetic variation on the regulation of transcription, isoform usage, and allele-specific expression. Systematic annotation of genome-wide association SNPs identifies 60 functional candidate genes for heart phenotypes, representing 20% of all published heart genome-wide association loci. Focusing on the dilated cardiomyopathy phenotype we found that eQTL variants are also enriched for dilated cardiomyopathy genome-wide association signals in two independent cohorts. Conclusions: RNA transcription, splicing, and allele-specific expression are each important determinants of the dilated cardiomyopathy phenotype and are controlled by genetic factors. Our results represent a powerful resource for the field of cardiovascular genetics.