Cochlear outer hair cells (OHCs) are fast biological motors that serve to enhance the vibration of the organ of Corti and increase the sensitivity of the inner ear to sound. Exactly how OHCs produce useful mechanical power at auditory frequencies, given their intrinsic biophysical properties, has been a subject of considerable debate. To address this we formulated a mathematical model of the OHC based on first principles and analyzed the power conversion efficiency in the frequency domain. The model includes a mixture-composite constitutive model of the active lateral wall and spatially distributed electro-mechanical fields. The analysis predicts that: 1) the peak power efficiency is likely to be tuned to a specific frequency, dependent upon OHC length, and this tuning may contribute to the place principle and frequency selectivity in the cochlea; 2) the OHC power output can be detuned and attenuated by increasing the basal conductance of the cell, a parameter likely controlled by the brain via the efferent system; and 3) power output efficiency is limited by mechanical properties of the load, thus suggesting that impedance of the organ of Corti may be matched regionally to the OHC. The high power efficiency, tuning, and efferent control of outer hair cells are the direct result of biophysical properties of the cells, thus providing the physical basis for the remarkable sensitivity and selectivity of hearing.