Permanent hearing loss is caused by the irreversible damage of cochlear sensory hair cells and nonsensory supporting cells. In the postnatal cochlea, the sensory epithelium is terminally differentiated, whereas tympanic border cells (TBCs) beneath the sensory epithelium are proliferative. The functions of TBCs are poorly characterized. Using an Axin2(lacZ) Wnt reporter mouse, we found transient but robust Wnt signaling and proliferation in TBCs during the first 3 postnatal weeks, when the number of TBCs decreases. In vivo lineage tracing shows that a subset of hair cells and supporting cells is derived postnatally from Axin2-expressing TBCs. In cochlear explants, Wnt agonists stimulated the proliferation of TBCs, whereas Wnt inhibitors suppressed it. In addition, purified Axin2(lacZ) cells were clonogenic and self-renewing in culture in a Wnt-dependent manner, and were able to differentiate into hair cell-like and supporting cell-like cells. Taken together, our data indicate that Axin2-positive TBCs are Wnt responsive and can act as precursors to sensory epithelial cells in the postnatal cochlea.