The zebrafish otic vesicle initially forms with only two sensory epithelia, the utricular and saccular maculae, which primarily mediate vestibular and auditory function, respectively. Here, we test the role of pax5, which is preferentially expressed in the utricular macula. Morpholino knockdown of pax5 disrupts vestibular function but not hearing. Neurons of the statoacoustic ganglion (SAG) develop normally. Utricular hair cells appear to form normally but a variable number subsequently undergo apoptosis and are extruded from the otic vesicle. Dendrites of the SAG persist in the utricle but become disorganized after hair cell loss. Hair cells in the saccule develop and survive normally. Otic expression of pax5 requires pax2a and fgf3, mutations in which cause vestibular defects, albeit by distinct mechanisms. Thus, pax5 works in conjunction with fgf3 and pax2a to establish and/or maintain the utricular macula and is essential for vestibular function. Developmental Dynamics 235:3026–3038, 2006. © 2006 Wiley-Liss, Inc.