Aiming to develop a stem cell based therapy for deafness; we have pursued the isolation and characterization of human auditory stem cells from different sources. Initially, we identified a population of auditory stem cells from the developing cochlea (human Foetal Auditory Stem Cells, HFASCS) that could be used as an in vitro model of differentiation. Using optimized culture conditions and growth factors we have selectively expanded a population of cells that express several stem cell markers such as NESTIN, SOX2 and OCT4. Cells proliferate for several months and remain undifferentiated. We have defined culture conditions that induce differentiation into neurons and hair cells. When transferred to neutralizing conditions, cells extend processes and readily differentiate into bipolar auditory neurons that express neuronal markers. They also display typical neuronal potassium and sodium currents. When exposed to hair cell conditions, several hair cell markers as well as potassium and calcium currents are induced. Second, we have induced differentiation of inner ear phenotypes from human Embryonic Stem Cells (hESCs). To achieve this we manipulated the culture conditions using factors that mimic the normal development of ear placodes in vivo. By this technique we have isolated cells expressing early placodal markers such as PAX8, PAX2 and GATA3. These cells can be induced to differentiate further into sensory neurons and hair cell-like phenotypes. These systems provide ideal models to study inner ear differentiation in humans and could prove highly useful for drug development and more importantly, for the generation of stem cell-based therapies for deafness.