Scleraxis (Scx) is a basic helix-loop-helix transcription factor expressed in tendon and ligament progenitor cells and the differentiated cells within these connective tissues in the axial and appendicular skeleton. Unexpectedly, we found expression of the Scx transgenic reporter mouse, Scx-GFP, in interdental cells, sensory hair cells, and cochlear supporting cells at embryonic day 18.5 (E18.5). We evaluated Scx-null mice to gain insight into the function of Scx in the inner ear. Paradoxical hearing loss was detected in Scx-nulls, with ~50% of the mutants presenting elevated auditory thresholds. However, Scx-null mice have no obvious, gross alterations in cochlear morphology or cellular patterning. Moreover, we show that the elevated auditory thresholds correlate with middle ear infection. Laser interferometric measurement of sound-induced malleal movements in the infected Scx-nulls demonstrates increased impedance of the middle ear that accounts for the hearing loss observed. The vertebrate middle ear transmits vibrations of the tympanic membrane to the cochlea. The tensor tympani and stapedius muscles insert into the malleus and stapes via distinct tendons and mediate the middle ear muscle reflex that in part protects the inner ear from noise-induced damage. Nothing, however, is known about the development and function of these tendons. Scx is expressed in tendon progenitors at E14.5 and differentiated tenocytes of the stapedius and tensor tympani tendons at E16.5-18.5. Scx-nulls have dramatically shorter stapedius and tensor tympani tendons with altered extracellular matrix consistent with abnormal differentiation in which condensed tendon progenitors are inefficiently incorporated into the elongating tendons. Scx-GFP is the first transgenic reporter that identifies middle ear tendon lineages from the time of their formation through complete tendon maturation. Scx-null is the first genetically defined mouse model for abnormal middle ear tendon differentiation. Scx mouse models will facilitate studies of tendon and muscle formation and function in the middle ear.