In the mouse embryo, Dlx5 is expressed in the otic placode and vesicle, and later in the semicircular canals of the inner ear. In mice homozygous for a null Dlx5/LacZ allele, a severe dysmorphogenesis of the vestibular region is observed, characterized by the absence of semicircular canals and the shortening of the endolymphatic duct. Minor defects are observed in the cochlea, although Dlx5 is not expressed in this region. Cristae formation is severely impaired; however, sensory epithelial cells, recognized by calretinin immunostaining, are present in the vestibular epithelium of Dlx5(-/-) mice. The maculae of utricle and saccule are present but cells appear sparse and misplaced. The abnormal morphogenesis of the semicircular canals is accompanied by an altered distribution of proliferating and apoptotic cells. In the Dlx5(-/-) embryos, no changes in expression of Nkx5.1(Hmx3), Pax2, and Lfng have been seen, while expression of bone morphogenetic protein-4 (Bmp4) was drastically reduced. Notably, BMP4 has been shown to play a fundamental role in vestibular morphogenesis of the chick embryo. We propose that development of the semicircular canals and the vestibular inner ear requires the independent control of several homeobox genes, which appear to exert their function via tight regulation of BPM4 expression and the regional organization of cell differentiation, proliferation, and apoptosis.