Potassium (K(+)) plays a very important role in the cochlea. K(+) is the major cation in endolymph and the charge carrier for sensory transduction and the generation of the endocochlear potential. The importance of K(+) handling in the cochlea is marked by the discovery of several forms of hereditary deafness that are due to mutations of K(+) channels. Deafness results from mutations of KCNQ4, a K(+) channel in the sensory hair cells, as well as from mutations of the gap junction proteins GJB2, GJB3 and GJB6 that may facilitate cell-to-cell movements of K(+). Deafness results also from mutations of KCNQ1 or KCNE1, subunits of a K(+) channel that carries K(+) from strial marginal cells and vestibular dark cells into endolymph. Further, deafness results from mutations of KCNJ10, a K(+) channel that generates the endocochlear potential in conjunction with the high K(+) concentration in strial intermediate cells and the low K(+) concentration in the intrastrial fluid spaces. This review details recent advances in the understanding of K(+) transport and its regulation in the cochlea and the vestibular labyrinth.