Cochlear melanocytes are intermediate cells in the stria vascularis that generate endocochlear potentials required for auditory function. Human PAX3 mutations cause Waardenburg syndrome and abnormalities of skin and retinal melanocytes, manifested as congenital hearing loss (~ 70%) and hypopigmentation of skin, hair and eyes. However, the underlying mechanism of hearing loss remains unclear. Cochlear melanocytes in the stria vascularis originated from Pax3-traced melanoblasts and Plp1-traced Schwann cell precursors, both of which derive from neural crest cells. Here, using a Pax3-Cre knock-in mouse that allows lineage tracing of Pax3-expressing cells and disruption of Pax3, we found that Pax3 deficiency causes foreshortened cochlea, malformed vestibular apparatus, and neural tube defects. Lineage tracing and in situ hybridization show that Pax3⁺ derivatives contribute to S100⁺, Kir4.1⁺ and Dct⁺ melanocytes (intermediate cells) in the developing stria vascularis, all of which are significantly diminished in Pax3 mutant animals. Taken together, these results suggest that Pax3 is required for the development of neural crest cell-derived cochlear melanocytes, whose absence may contribute to congenital hearing loss of Waardenburg syndrome in humans.