Our goal is to identify molecular mechanisms underlying normal morphogenesis of the vertebrate inner ear. Our major accomplishments this year are as follows: 1) Demonstrated that Nor-1 is important for normal proliferation of the semicircular canals. Nor-1 belongs to a subclass of the nuclear receptor transcription factor family that apparently can function constitutively without being bound to ligand. Nor-1 null mice display hyperactivity and circling behavior indicative of vestibular defects. In collaboration with Dr. Orla Conneely?s laboratory who had generated the Nor-1 knock out mice, we showed that Nor-1 is not essential for the initial formation of the semicircular canals and ampullae, but is important for the continual growth of these structures after their formation. The Nor-1 positive domain in the semi-circular canals is separate from the region of active proliferation suggesting that Nor-1 mediates its effect on cell proliferation in a non-cell autonomous fashion. 2) Investigated the role of Bone Morphogenetic Proteins (BMPs) during chondrogenesis of the otic capsule in chicken. By infecting chicken otocysts with avian retroviral vectors encoding dominant negative or constitutive active BMP receptors (RCAS-dnalk6, RCAS-caALK6), as well as by implanting beads soaked with Noggin (an antagonist to BMPs) into the developing inner ear, we showed that BMP is important for chondrocyte differentiation in the otic capsule. Blocking functions of BMPs using RCAS-dnALK6 or Noggin soaked beads resulted in arrest of chondrogenesis at a cartilage pre-condensation stage, whereas infection with RCAS-caALK6 promoted chondrocyte differentiation. 3) Investigated the function of Pax2 in inner ear development. Pax2, a paired-box transcription factor, is one of the earliest genes to be activated during inner ear development. It has been reported that Pax2 knock mice have agenesis of the cochlea. In contrast, all of the Pax2 knock out mice that we examined had a rudimentary cochlear duct with poorly developed sensory tissue. In addition, the endolymphatic duct was fused to the common crus, and the saccule was malformed in these mutants. Structures affected in the Pax2 mutants are well correlated with the expression domains of Pax2, but the various extent of severity observed among different structures appears to correlate with whether or not Pax8 is co-expressed in those regions. Regions co-expressing Pax2 and Pax8 were less affected than regions expressing Pax2 alone. Thus, Pax2 and 8 most likely have redundant functions during inner ear development. Furthermore, in collaboration with Dr. Friedman?s laboratory in our intramural program, we have demonstrated that Claudin-14, a tight junction protein responsible for causing autosomal deafness DFNB29, is expressed in sensory regions of the cochlea.