Members of the Eyes absent (Eya) gene family are important for auditory system development. While mutations in human EYA4 cause late-onset deafness at the DFNA10 locus, mutations in human EYA1 cause branchio-oto-renal (BOR) syndrome. Inactivation of Eya1 in mice causes an early arrest of the inner ear development at the otocyst stage. To better understand the role of Eya1 in inner ear development, we analyzed the cellular and molecular basis of the early defect observed in the Eya1 mutant embryos. We report here that Eya1-/- otic epithelium shows reduced cell proliferation from E8.5 and increased cell apoptosis from E9.0, thus providing insights into the cellular basis of inner ear defect which occurred in the absence of Eya1. Previous studies have suggested that Pax, Eya and Six genes function in a parallel or independent pathway during inner ear development. However, it remains unknown whether Pax genes interact with Eya1 or Six1 during inner ear morphogenesis. To further evaluate whether Pax genes function in the Eya1-Six1 pathway or whether they interact with Eya1 or Six1 during inner ear morphogenesis, we have analyzed the expression pattern of Eya1, Pax2 and Pax8 on adjacent sections of otic epithelium from E8.5 to 9.5 by in situ hybridization and the inner ear gross structures of Pax2, Eya1 and Six1 compound mutants at E17.5 by latex paintfilling. Our data strongly suggest that Pax2 interacts with Eya1 during inner ear morphogenesis, and this interaction is critical for the development of all sensory areas in the inner ear. Furthermore, otic marker analysis in both Eya1-/- and Pax2-/- embryos indicates that Eya1 but not Pax2 regulates the establishment of regional specification of the otic vesicle. Together, these results show that, while Eya1 exerts an early function essential for normal growth and patterning of the otic epithelium, it also functionally synergizes with Pax2 during the morphogenesis of all sensory areas of mammalian inner ear.