HDR syndrome (also known as Barakat syndrome) is a developmental disorder characterized by hypoparathyroidism, sensorineural deafness and renal disease. Although genetic mapping and subsequent functional studies indicate that GATA3 haplo-insufficiency causes human HDR syndrome, the role of Gata3 in sensorineural deafness and auditory system development is largely unknown. In this study, we show that Gata3 is continuously expressed in the developing mouse inner ear. Conditional knockout of Gata3 in the developing inner ear disrupts the morphogenesis of mouse inner ear, resulting in a disorganized and shortened cochlear duct with significant fewer hair cells and supporting cells. Loss of Gata3 function leads to the failure in the specification of prosensory domain and subsequently, to increased cell death in the cochlear duct. Moreover, though the initial generation of cochleovestibular ganglion (CVG) cells is not affected in Gata3-null mice, spiral ganglion neurons (SGNs) are nearly depleted due to apoptosis. Our results demonstrate the essential role of Gata3 in specifying the prosensory domain in the cochlea and in regulating the survival of SGNs, thus identifying a molecular mechanism underlying human HDR syndrome.