One of the most striking aspects of the cellular pattern within the sensory epithelium of the mammalian cochlea is the presence of two rows of pillar cells in the region between the single row of inner hair cells and the first row of outer hair cells. The factors that regulate pillar cell development have not been determined; however, previous results suggested a key role for fibroblast growth factor receptor 3 (FGFR3). To examine the specific effects of FGFR3 on pillar cell development, we inhibited receptor activation in embryonic cochlear explant cultures. Results indicated that differentiation of pillar cells is dependent on continuous activation of FGFR3. Moreover, transient inhibition of FGFR3 did not inhibit the pillar cell fate permanently, because reactivation of FGFR3 resulted in the resumption of pillar cell differentiation. The effects of increased FGFR3 activation were determined by exposing cochlear explants to FGF2, a strong ligand for several FGF receptors. Treatment with FGF2 led to a significant increase in the number of pillar cells and to a small increase in the number of inner hair cells. These effects were not dependent on cellular proliferation, suggesting that additional pillar cells and inner hair cells were a result of increased recruitment into the prosensory domain. These results indicate that FGF signaling plays a critical role in the commitment and differentiation of pillar cells. Moreover, the position of the pillar cells appears to be determined by the activation of FGFR3 in a subset of the progenitor cells that initially express this receptor.