To elucidate the transcriptional regulation that underlies specification of the otic placode, we investigated the Sox3 downstream enhancer Otic1 of the chicken, the activity of which is restricted to and distributed across the entire otic placode. The 181-bp Otic1 enhancer sequence was dissected into a 68-bp minimal activating sequence, which exhibited dimer enhancer activity in the otic placode and cephalic neural crest, and this was further reduced to a 25-bp Otic1 core sequence, which also showed octamer enhancer activity in the same regions. The Otic1 core octamer was activated by the combined action of Sall4 and the SoxE transcription factors (TFs) Sox8 or Sox9. Binding of Sall4, Sox8 and Sox9 to the Otic1 sequence in embryonic tissues was confirmed by ChIP-qPCR analysis. The core-adjoining 3' side sequences of Otic1 augmented its enhancer activity, while inclusion of the CAGGTG sequence in the immediate 3' end of the 68-bp sequence repressed its enhancer activity outside the otic placode. The CAGGTG sequence likely serves as the binding sites of the repressor TFs δEF1 (Zeb1), Sip1 (Zeb2), and Snail2, all of which are expressed in the cephalic neural crest but not in the otic placode. Therefore, the combination of Sall4-Sox8-dependent activation and CAGGTG sequence-dependent repression determines otic placode development. Although the Otic1 sequence is not conserved in mammals or fishes, the activation mechanism is, as Otic1 was also activated in otic placode tissues developed from mouse embryonic stem cells and transient transgenic zebrafish embryos.