The vertebrate inner ear develops from the otic placode, an ectodermal thickening that forms adjacent to the presumptive hindbrain. Previous studies have suggested that competent ectodermal cells respond to signals from adjacent tissues to form the placode. Members of the Fgf family of growth factors and the Dlx family of transcription factors have been implicated in this signal-response pathway. We show that compromising Fgf3 and Fgf8 signaling blocks ear development; only a few scattered otic cells form. Removal of dlx3b, dlx4b and sox9a genes together also blocks ear development, although a few residual cells form an otic epithelium. These cells fail to form if sox9b function is also blocked. Combined loss of Fgf signaling and the three transcription factor genes, dlx3b,dlx4b and sox9a, also completely eliminates all indications of otic cells. Expression of sox9a but not dlx3b, dlx4b or sox9b requires Fgf3 and Fgf8. Our results provide evidence for Fgf3-and Fgf8-dependent and -independent genetic pathways for otic specification and support the notion that Fgf3 and Fgf8 function to induce both the otic placode and the epithelial organization of the otic vesicle.