The expression of unconventional vesicular glutamate transporter VGLUT3 by neurons known to release a different classical transmitter has suggested novel roles for signaling by glutamate. However, this distribution, along with the localization of VGLUT3 to dendrites and its occurrence outside the nervous system, has raised questions about whether the protein actually contributes to glutamate release. We now report that mice lacking VGLUT3 are profoundly deaf due to the absence of glutamate release from hair cells at the first synapse in the auditory pathway. Inner hair cells of the cochlea start to express VGLUT3 shortly before birth, and the early degeneration of some cochlear ganglion neurons in knock-out mice indicates an important developmental role for the glutamate released by hair cells before the onset of hearing. In addition, the mice exhibit primary, generalized epilepsy that is accompanied by remarkably little or no change in ongoing motor behavior. VGLUT3 thus contributes to the exocytotic release of glutamate, and the glutamate released has an essential role in both function and development of the auditory pathway, as well as in the control of cortical excitability.