The vertebrate inner ear forms a highly complex sensory structure responsible for the detection of sound and balance. Some new aspects on the evolutionary and developmental origin of the inner ear are summarised here. Recent molecular data have challenged the longstanding view that special sense organs such as the inner ear have evolved with the appearance of vertebrates. In addition, it has remained unclear whether the ear originally arose through a modification of the amphibian mechanosensory lateral line system or whether both evolved independently. A comparison of the developmental mechanisms giving rise to both sensory systems in different species should help to clarify some of these controversies. During embryonic development, the inner ear arises from a simple epithelium adjacent to the hindbrain, the otic placode, that is specified through inductive interactions with surrounding tissues. This review summarises the embryological evidence showing that the induction of the otic placode is a multistep process which requires sequential interaction of different tissues with the future otic ectoderm and the recent progress that has been made to identify some of the molecular players involved. Finally, the hypothesis is discussed that induction of all sensory placodes initially shares a common molecular pathway, which may have been responsible to generate an ‘ancestral placode’ during evolution.