In both chick and mouse, the otic placode, the rudiment of the inner ear, is induced by at least two signals, one from the cephalic paraxial mesoderm and the other from the neural ectoderm. In chick, the mesodermal signal, FGF19, induces neural ectoderm to express additional signals, including WNT8c and FGF3, resulting in induction of the otic placode. In mouse, mesodermalFgf10acting redundantly with neuralFgf3is required for induction of the placode. To determine how the mesodermal inducers of the otic placode are localized, we took advantage of the unique strengths of the two model organisms. We show that endoderm is necessary for otic induction in the chick and thatFgf8, expressed in the chick endoderm subjacent toFgf19, is both sufficient and necessary for the expression ofFgf19in the mesoderm. In the mouse,Fgf8is also expressed in endoderm as well as in other germ layers in the periotic placode region. We show that otic induction fails in embryos null forFgf3and hypomorphic forFgf8and expression of mesodermalFgf10is reduced. Thus,Fgf8plays a critical upstream role in an FGF signaling cascade required for otic induction in chick and mouse.