The epithelium lining the inner ear contains a large number of differentiated cell types, arranged in precise patterns. Once the otocyst has closed, do the cells differentiate according to mechanisms intrinsic to the epithelium or are they dependent on external influences? In particular, are they governed by signals from the surrounding periotic mesenchyme? And is the closed structure of the inner ear or the otocyst fluid that it contains important for pattern formation and differentiation as it is for adult function? We have examined these questions by two types of grafting experiment. In the first, early (E3, stage 17-18, or E2, stage 13-14) undifferentiated quail otocysts were stripped of their mesenchyme and grafted into the wing buds of chick embryos. Although surrounded by a foreign mesenchyme the otic epithelium differentiated into the standard inner ear cell types. The gross morphology was abnormal, and the sensory hair cells were grouped into a few large patches instead of the usual eight smaller patches; locally, however, the spatial relationships between the differentiated cell types appeared normal. In the second experiment, open fragments of early undifferentiated otocyst (with some adhering mesenchyme) were grafted onto the surface of a limb bud. In this exposed in vivo situation, where the apical surface of the epithelium is bathed by amniotic fluid instead of otocyst fluid, differentiation proceeds normally also. Thus differentiation of inner ear epithelium at these stages does not require any specific influence from otic mesenchyme and proceeds independently of whether the otocyst is open or closed. Such epithelial autonomy creates special opportunities for in vitro analysis.