During inner ear development, specification of sensory epithelia requires dynamic regulation of Fgf signaling. In zebrafish, high levels of Fgf are necessary and sufficient to specify the utricular/vestibular macula, whereas the saccular/auditory macula requires a discreet lower level of Fgf. Transcription factors Pax2a and Pax5 act downstream of Fgf to help specify utricular identity, loss of which leads to sporadic extrusion of hair cells from the utricular macula. The mechanism for utricular instability is not clear but is potentially related to reduced expression of cdh1/Ecad caused by disruption of pax2a. Here we find that utricular hair cells in pax2-/- and pax5-/- mutants gradually lose adhesive contact with the macula, leading to ejection of intact hair cells from either the basal or apical surface. The phenotype is far more severe in pax2a-/- mutants and is progressive, resulting in loss of large swaths of the utricular hair cells by 82 hpf. Instability is caused by elevated Fgf signaling in the utricle, as modest reduction of Fgf signaling with a low dose of SU5402 prevents hair cell loss in pax2a-/- mutants. Misexpression of cdh1/Ecad in pax2a-/- mutants partially rescues pax2a-/- mutants. Elevating β-catenin levels by treatment with BIO, or misexpression of a mutant form of β-catenin lacking transcriptional activity but retaining cell adhesion function, fully rescues pax2a-/- mutants. In contrast, Wnt signaling is not required for utricular stability. Thus, Pax2/5 factors serve to counteract the destabilizing effects of elevated Fgf signaling needed to specify utricular identity.