An optical laser differential interferometer, based on a modified differential interference contrast microscope, has been developed to measure the thermal motion of microscopic protrusions (stereocilia) that are the sites of mechanoelectrical transduction in auditory hair cells. The measurement sensitivity was limited at high frequencies mainly by shot noise, at intermediate frequencies by acoustic interference, and at low frequencies by thermal drift. The power spectral density of the instrumental noise was found to be as low as 1. pm/ radicalHz in the shot noise regime. We could, thus, measure the Brownian motion of hair bundles over the frequency range from 1 Hz-100 kHz. Experimental data that test and demonstrate the sensitivity and spatial discrimination of the instrument were found to be in agreement with theoretical estimates.