In hair cells, mechanotransduction channels are gated by tip links, the extracellular filaments that consist of cadherin 23 (CDH23) and protocadherin 15 (PCDH15) and connect the stereocilia of each hair cell. However, which molecules mediate cadherin function at tip links is not known. Here we show that the PDZ-domain protein harmonin is a component of the upper tip-link density (UTLD), where CDH23 inserts into the stereociliary membrane. Harmonin domains that mediate interactions with CDH23 and F-actin control harmonin localization in stereocilia and are necessary for normal hearing. In mice expressing a mutant harmonin protein that prevents UTLD formation, the sensitivity of hair bundles to mechanical stimulation is reduced. We conclude that harmonin is a UTLD component and contributes to establishing the sensitivity of mechanotransduction channels to displacement.