The auditory sensory epithelium is the specialized region of the cochlear epithelium that transduces sound. It is composed of a highly ordered, repeated array of mechanosensory hair cells and nonsensory supporting cells that run along the length of the cochlea. On the apical surface of the hair cells is a specialized structure called the hair bundle that deflects in response to sound vibration, resulting in depolarization of the hair cell and neurotransmitter release. Formation of the auditory sensory epithelium during embryogenesis involves strict control of both cell proliferation and cell patterning. Misregulation of these events can lead to congenital hearing loss, and damage to the auditory sensory epithelium during adult life can lead to adult-onset deafness. This paper reviews recent data on the formation of the auditory sensory epithelium during embryogenesis, the identification of components of the sound transduction apparatus, and advances in the treatment of hearing impairment.