Sox2 is a high-mobility transcription factor that is one of the earliest markers of developing inner ear prosensory domains. In humans, mutations in SOX2 cause sensorineural hearing loss and a loss of function study in mice showed that Sox2 is required for prosensory formation in the cochlea. However, the specific roles of Sox2 have not been determined. Here we illustrate a dynamic role of Sox2 as an early permissive factor in prosensory domain formation followed by a mutually antagonistic relationship with Atoh1, a bHLH protein necessary for hair cell development. We demonstrate that decreased levels of Sox2 result in precocious hair cell differentiation and an over production of inner hair cells and that these effects are likely mediated through an antagonistic interaction between Sox2 and the bHLH molecule Atoh1. Using gain-and loss-of-function experiments we provide evidence for the molecular pathway responsible for the formation of the cochlear prosensory domain. Sox2 expression is promoted by Notch signaling and Prox1, a homeobox transcription factor, is a downstream target of Sox2. These results demonstrate crucial and diverse roles for Sox2 in the development, specification, and maintenance of sensory cells within the cochlea.development ͉ organ of Corti ͉ inner ear ͉ HMG box ͉ bHLH T he sensory epithelium of the mammalian cochlea (the organ of Corti) develops from a pool of prosensory cells derived from the ventral region of the otocyst. Proper development of the cochlea requires that cochlear progenitor cells transition through states of developmental competence, coordinated cell cycle exit, and cell fate specification and differentiation to generate the distinctly fated cell populations within the highly ordered mosaic of the organ of Corti (1). The signal transduction pathways that coordinate cochlear prosensory specification are only beginning to be identified. Moreover, since these signal transduction pathways are unlikely to be linear cascades, it will also be necessary to determine how different pathways are organized into complex signaling networks that ultimately generate precise and unique responses within individual cochlear prosensory cells.Sox (SRY related HMG box) proteins are a group of transcription factors that regulate diverse developmental processes; for instance, Sox2 is a universal marker of stem cells and is also expressed in neural progenitor cells at different stages of central nervous system development. Sox2, along with Sox1 and Sox3, comprise the SoxB1 group. Members of this group are thought to maintain neural precursor cells in a progenitor state by inhibiting bHLH-mediated neuronal differentiation (2). Reciprocally, bHLH proteins must suppress expression and activity of SoxB1 proteins to induce cellular differentiation. A recent loss-of-function study demonstrated that Sox2 is required for development of sensory epithelia, including the organ of Corti, within the inner ear (3). However, despite its absolute necessity for the formation of inner ear sensory epithelia, the spe...