In mammals, formation of the auditory sensory organ (the organ of Corti) is restricted to a specialized area of the cochlea. However, the molecular mechanisms limiting sensory formation to this discrete region in the ventral cochlear duct are not well understood, nor is it known whether other regions of the cochlea have the competence to form the organ of Corti. Here we identify LMO4, a LIM-domain-only nuclear protein, as a negative regulator of sensory organ formation in the cochlea. Inactivation of Lmo4 in mice leads to an ectopic organ of Corti (eOC) located in the lateral cochlea. The eOC retains the features of the native organ, including inner and outer hair cells, supporting cells, and other nonsensory specialized cell types. However, the eOC shows an orientation opposite to the native organ, such that the eOC appears as a mirror-image duplication to the native organ of Corti. These data demonstrate a novel sensory competent region in the lateral cochlear duct that is regulated by LMO4 and may be amenable to therapeutic manipulation.