The early stages of otic placode development depend on signals from neighbouring tissues including the hindbrain. The identity of these signals and of the responding placodal genes, however, is not known. We have identified a chick homeobox gene cNkx5-1, which is expressed in the otic placode beginning at stage 10 and exhibits a dynamic expression pattern during formation and further differentiation of the otic vesicle. In a series of heterotopic transplantation experiments, we demonstrate that cNkx5-1 can be activated in ectopic positions. However, significant differences in otic development and cNkx5-1 gene activity were observed when placodes were transplanted into the more rostral positions within the head mesenchyme or into the wing buds of older hosts. These results indicate that only the rostral tissues were able to induce and/or maintain ear development. Ectopically induced cNkx5-1 expression always reproduced the endogenous pattern within the lateral wall of the otocyst that is destined to form vestibular structures. In contrast, cPax2 which is expressed in the medial wall of the early otic vesicle later forming the cochlea never resumed its correct expression pattern after transplantation. Our experiments illustrate that only some aspects of gene expression and presumably pattern formation during inner ear development can be established and maintained ectopically. In particular, the dorsal vestibular structures seem to be programmed earlier and differently from the ventral cochlear part.