Inhibitory neurotransmission plays a substantial role in encoding of auditory cues relevant for sound localization in vertebrates. While the anatomical organization of the respective afferent auditory brainstem circuits shows remarkable similarities between mammals and birds, the properties of inhibitory neurotransmission in these neural circuits are strikingly different. In mammals, inhibition is predominantly glycinergic and endowed with fast kinetics. In birds, inhibition is mediated by γ-Aminobutiric acid (GABA) and too slow to convey temporal information. A further prominent difference lies in the mechanism of inhibition in the respective systems. In auditory brainstem neurons of mammals, [Cl-]i undergoes a developmental shift causing the actions of GABA and glycine to gradually change from depolarization to the ‘classic’ hyperpolarizing-inhibition before hearing onset. Contrary to this, in the mature avian auditory brainstem Cl- homeostasis mechanisms accurately adjust the Cl- gradient to enable depolarizing, but still very efficient, shunting inhibition. The present review considers the mechanisms underlying development of the Cl- homeostasis in the auditory system of mammals and birds and discusses some open issues that require closer attention in future studies.