Sensory hair cells (HCs) and their associated nonsensory supporting cells (SCs) exhibit a typical mosaic pattern in each of the sensory patches in the inner ear. Notch signaling has been considered to conduct the formation of this mosaic pattern through one of its famous functions, known as 'lateral inhibition'. The two Notch ligands Delta-like1 and Jagged2 are believed to act synergistically at the stage of cell diversification in mammals. In addition, many current studies suggest that Notch signaling has another inductive, but not inhibiting, role in the determination of the prosensory region, which precedes the cell diversification of HCs and SCs and Jagged1 is thought to be an essential ligand in this process. Earlier in ear development, the first cell fate determination begins with the delamination of the neuroblasts from the otic epithelium. The delaminated neuroblasts migrate and coalesce to form cochleovestibular ganglion. Notch signaling pathway is thought to function during the delamination through its lateral inhibitory mechanism. Recently, many experiments examining Notch-related gene expression patterns and direct functional analyses of genes have revealed multiple important functions of Notch in inner ear development. Here, we survey a series of studies and discuss the issues that remain to be elucidated in the future.