Given the two‐port description of a hair cell from Weiss [Hear. Res. 7, 353–360 (1982)], with the Davis model for the angle‐dependent conductance representing the transduction channels [Leong and Weiss, Hear. Res. 20, 175–195 (1985)], and the data of Crawford and Fettiplace [J. Physiol. 364, 359–379 (1985)], Howard and Hudspeth [Neuron 1, 189–199 (1988)], and Holton and Hudspeth [J. Physiol. 375, 195–227 (1986)], analysis shows that (1) the feedback inherent in the two‐port must be positive, and (2) degenerative (outward‐flowing) channels must be present. The static nonlinear behavior of the system, and the small and large signal dynamics, have been studied. The system displays Q multiplication at low signal levels, bandwidth increase with signal level, a compressive nonlinearity at CF, and continuous oscillations if the parameters are slightly misadjusted—all well‐documented physiological phenomena.