The inner ear of all jawed vertebrates arises from the epithelium of the otic vesicle and contains three semicircular canals, otoliths, and sets of sensory neurons, all positioned precisely within the cranium to detect head orientation and movement. The msh-C gene and two new homebox genes, msh-D and a gene related to distal-less, dlx-3, are each expressed in distinct regions of the otic vesicle during its early development in zebrafish embryos. Cells in the ectoderm express dlx-3 before induction of the otic vesicle, suggesting that dlx-3 has an early function in this process. Later, cells aligned with the future axes of the semicircular canals specifically express either dlx-3 or msh-D. Even later, sensory hair cells express msh-C and msh-D, while other cells of the epithelium express dlx-3. The early expression of these genes could specify the orientation and morphogenesis of the inner ear, whereas their later expression could specify the fates of particular cell types.