The inner ear is induced from cranial ectoderm adjacent to the hindbrain. Despite almost a century of study, the molecular mechanisms of inner ear induction remain obscure. We have identified four genes expressed very early in the anlage of the inner ear, the otic placode. Pax-2, Sox-3, BMP-7 and Notch are all expressed in placodal ectoderm from the 4–5 somite stage (ss) onwards, well before the otic placode becomes morphologically visible at the 12–14ss. We have used these four molecular markers to show that cranial ectoderm becomes specified to form the otic placode at the 4–6ss, and that this ectoderm is committed to a placodal fate by the 10ss. We also demonstrate that much of the embryonic ectoderm is competent to generate an otic placode if taken at a sufficiently early age. We have mapped the location of otic placode-inducing activity along the rostrocaudal axis of the embryo, and have determined that this activity persists at least until the 10ss. Use of the four molecular otic placode markers suggests that induction of the otic placode in birds occurs earlier than previously thought, and proceeds in a series of steps that are independently regulated.