Cochlear endolymph, an extracellular solution containing 150 mM K(+), exhibits a positive potential of +80 mV. This is called the endocochlear potential (EP) and is essential for audition. The mechanism responsible for formation of the EP has been an enigma for the half century since its first measurement. A key element is the stria vascularis, which displays a characteristic tissue structure and expresses multiple ion-transport apparatus. The stria comprises two epithelial layers: a layer of marginal cells and one composed of intermediate and basal cells. Between the two layers lies an extracellular space termed the intrastrial space (IS), which is thus surrounded by the apical membranes of intermediate cells and the basolateral membranes of marginal cells. The fluid in the IS exhibits a low concentration of K(+) and a positive potential similar to the EP. We have demonstrated that the IS is electrically isolated from the neighboring extracellular fluids, perilymph, and endolymph, which allows the IS to sustain its positive potential. This IS potential is generated by K(+) diffusion across the apical membranes of intermediate cells, where inwardly rectifying Kir4.1 channels are localized. The low K(+) concentration in the IS, which is mandatory for the large K(+)-diffusion potential, is maintained by Na(+),K(+)-ATPases and Na(+),K(+),2Cl(-)-cotransporters expressed at the basolateral membranes of marginal cells. An additional K(+)-diffusion potential formed by KCNQ1/KCNE1-K(+) channels at the apical membranes of marginal cells also contributes to the EP. Therefore, the EP depends on an electrically isolated space and two K(+)-diffusion potentials in the stria vascularis.