Reactive oxygen species (ROS) can act cell autonomously and in a paracrine manner by diffusing into nearby cells. Here, we reveal a ROS-mediated paracrine signaling mechanism that does not require entry of ROS into target cells. We found that under physiological conditions, nonmyocytic pericardial cells (PCs) of the Drosophila heart contain elevated levels of ROS compared to the neighboring cardiomyocytes (CMs). We show that ROS in PCs act in a paracrine manner to regulate normal cardiac function, not by diffusing into the CMs to exert their function, but by eliciting a downstream D-MKK3-D-p38 MAPK signaling cascade in PCs that acts on the CMs to regulate their function. We find that ROS-D-p38 signaling in PCs during development is also important for establishing normal adult cardiac function. Our results provide evidence for a previously unrecognized role of ROS in mediating PC/CM interactions that significantly modulates heart function.