The inner ear is derived from the otic placode, one of numerous cranial sensory placodes that emerges from the pre-placodal ectoderm (PPE). However, the molecular dynamics underlying how the PPE is induced and regionalized are poorly resolved. We used stem cell-derived inner ear organoids to investigate the effects of Wnt signaling on otic placode development and found that modulating Wnt signaling to give intermediate activation of its downstream pathway significantly increased inner ear organoid induction efficiency. Single cell RNA-sequencing revealed that the Wnt modulation induces 1) gene signatures of the posterior PPE (pPPE), 2) expansion of the caudal neural plate border (NPB), and 3) a suitable caudal head microenvironment. Our data also suggest that precursors of the pPPE committed to caudal fate during the NPB stage. Taken together, this study improves our understanding of the role of Wnt signaling in the early development of the inner ear.