Nor-1 belongs to the nur subfamily of nuclear receptor transcription factors. The precise role of Nor-1 in mammalian development has not been established. However, recent studies indicate a function for this transcription factor in oncogenesis and apoptosis. To examine the spatiotemporal expression pattern of Nor-1 and the developmental and physiological consequences of Nor-1 ablation, Nor-1-null mice were generated by insertion of the lacZ gene into the Nor-1 genomic locus. Disruption of the Nor-1 gene results in inner ear defects and partial bidirectional circling behavior. During early otic development, Nor-1 is expressed exclusively in the semicircular canal forming fusion plates. After formation of the membranous labyrinth, Nor-1 expression in the vestibule is limited to nonsensory epithelial cells localized at the inner edge of the semicircular canals and to the ampullary and utricular walls. In the absence of Nor-1, the vestibular walls fuse together as normal; however, the endolymphatic fluid space in the semicircular canals is diminished and the roof of the ampulla appears flattened due to defective continual proliferative growth of the semicircular canals.