Vertebrate Pax2 and Pax8 proteins are closely related transcription factors hypothesized to regulate early aspects of inner ear development. In zebrafish and mouse, Pax8 expression is the earliest known marker of otic induction, and Pax2 homologs are expressed at slightly later stages of placodal development. Analysis of compound mutants has not been reported. To facilitate analysis of zebrafish pax8, we completed sequencing of the entire gene, including the 5' and 3' UTRs. pax8 transcripts undergo complex alternative splicing to generate at least ten distinct isoforms. Two different subclasses of pax8 splice isoforms encode different translation initiation sites. Antisense morpholinos (MOs) were designed to block translation from both start sites, and four additional MOs were designed to target different exon-intron boundaries to block splicing. Injection of MOs, individually and in various combinations, generated similar phenotypes. Otic induction was impaired, and otic vesicles were small. Regional ear markers were expressed correctly, but hair cell production was significantly reduced. This phenotype was strongly enhanced by simultaneously disrupting either of the co-inducers fgf3 or fgf8, or another early regulator, dlx3b, which is thought to act in a parallel pathway. In contrast, the phenotype caused by disrupting foxi1, which is required for pax8 expression, was not enhanced by simultaneously disrupting pax8. Disrupting pax8, pax2a and pax2b did not further impair otic induction relative to loss of pax8 alone. However, the amount of otic tissue gradually decreased in pax8-pax2a-pax2b-deficient embryos such that no otic tissue was detectable by 24 hours post-fertilization. Loss of otic tissue did not correlate with increased cell death, suggesting that otic cells dedifferentiate or redifferentiate as other cell type(s). These data show that pax8 is initially required for normal otic induction, and subsequently pax8, pax2a and pax2b act redundantly to maintain otic fate.