At embryonic day 8.5, the LIM-homeodomain factor Lmx1a is expressed throughout the otic placode but becomes developmentally restricted to non-sensory epithelia of the ear (endolymphatic duct, ductus reuniens, cochlea lateral wall). We confirm here that the ears of newborn dreher (Lmx1a (dr)) mutants are dysmorphic. Hair cell markers such as Atoh1 and Myo7 reveal, for the first time, that newborn Lmx1a mutants have only three sensory epithelia: two enlarged canal cristae and one fused epithelium comprising an amalgamation of the cochlea, saccule, and utricle (a "cochlear-gravistatic" endorgan). The enlarged anterior canal crista develops by fusion of horizontal and anterior crista, whereas the posterior crista fuses with an enlarged papilla neglecta that may extend into the cochlear lateral wall. In the fused endorgan, the cochlear region is distinguished from the vestibular region by markers such as Gata3, the presence of a tectorial membrane, and cochlea-specific innervation. The cochlea-like apex displays minor disorganization of the hair and supporting cells. This contrasts with the basal half of the cochlear region, which shows a vestibular epithelium-like organization of hair cells and supporting cells. The dismorphic features of the cochlea are also reflected in altered gene expression patterns. Fgf8 expression expands from inner hair cells in the apex to most hair cells in the base. Two supporting cell marker proteins, Sox2 and Prox1, also differ in their cellular distribution between the base and the apex. Sox2 expression expands in mutant canal cristae prior to their enlargement and fusion and displays a more diffuse and widespread expression in the base of the cochlear region, whereas Prox1 is not detected in the base. These changes in Sox2 and Prox1 expression suggest that Lmx1a expression restricts and sharpens Sox2 expression, thereby defining non-sensory and sensory epithelium. The adult Lmx1a mutant organ of Corti shows a loss of cochlear hair cells, suggesting that the long-term maintenance of hair cells is also disrupted in these mutants.