The sensory hair cells and supporting cells of the organ of Corti are generated by a precise program of coordinated cell division and differentiation. Since no regeneration occurs in the mature organ of Corti, loss of hair cells leads to deafness. To investigate the molecular basis of hair cell differentiation and their lack of regeneration, we have established a dissociated cell culture system in which sensory hair cells and supporting cells can be generated from mitotic precursors. By incorporating a Math1-GFP transgene expressed exclusively in hair cells, we have used this system to characterize the conditions required for the growth and differentiation of hair cells in culture. These conditions include a requirement for epidermal growth factor, as well as the presence of periotic mesenchymal cells. Lastly, we show that early postnatal cochlear tissue also contains cells that can divide and generate new sensory hair cells in vitro.