Sox9 encodes an HMG-domain transcription factor that is critically required in numerous developmental processes such as chondrogenesis and otic placode formation. Here, we show that Sox9 is expressed in the mesenchyme surrounding the developing cochlea in the mouse suggesting that Sox9 may also control development of the otic fibrocyte compartment and the surrounding otic capsule. Tissue-specific inactivation of Sox9 in the periotic mesenchyme using a Tbx18(Cre) mouse line results in arrest of early chondrogenesis and consequently, in a lack of cochlear otic capsule formation. Furthermore, loss of Sox9 severely compromises expansion, differentiation and remodeling of the otic fibrocyte compartment. Early cell proliferation defects in the entire periotic mesenchyme of Sox9-deficient inner ears suggest a cell-autonomous function of Sox9 for the development of the inner mesenchymal compartment. Abnormal cochlear duct morphogenesis in Sox9 mutants including disruption of the coiling process is tightly associated with the onset of mesenchymal defects whereas the absence of major differentiation defects in the otic epithelium suggests that Sox9-dependent mesenchymal signals primarily control epithelial morphogenesis.