The neurally expressed genes Brn-3.1 and Brn-3.2 (refs 1-6) are mammalian orthologues of the Caenorhabditis elegans unc-86 gene that constitute, with Brn-3.0 (refs 1-3,8,9), the class IV POU-domain transcription factors. Brn-3.1 and Brn-3.2 provide a means of exploring the potentially distinct biological functions of expanded gene families in neural development. The highly related members of the Brn-3 family have similar DNA-binding preferences and overlapping expression patterns in the sensory nervous system, midbrain and hindbrain, suggesting functional redundancy. Here we report that Brn-3.1 and Brn-3.2 critically modulate the terminal differentiation of distinct sensorineural cells in which they exhibit selective spatial and temporal expression patterns. Deletion of the Brn-3.2 gene causes the loss of most retinal ganglion cells, defining distinct ganglion cell populations. Mutation of Brn-3.1 results in complete deafness, owing to a failure of hair cells to appear in the inner ear, with subsequent loss of cochlear and vestibular ganglia.