Mechanosensitive sensory hair cells are the linchpin of our senses of hearing and balance. The inability of the mammalian inner ear to regenerate lost hair cells is the major reason for the permanence of hearing loss and certain balance disorders. Here, we present a stepwise guidance protocol starting with mouse embryonic stem and induced pluripotent stem cells, which were directed toward becoming ectoderm capable of responding to otic-inducing growth factors. The resulting otic progenitor cells were subjected to varying differentiation conditions, one of which promoted the organization of the cells into epithelial clusters displaying hair cell-like cells with stereociliary bundles. Bundle-bearing cells in these clusters responded to mechanical stimulation with currents that were reminiscent of immature hair cell transduction currents.