Extracellular nucleotides, particularly adenosine 5'-triphosphate (ATP), act as signaling molecules in the inner ear. Roles as neurotransmitters, neuromodulators, and as autocrine or paracrine humoral factors are evident. The diversity of the signaling pathways for nucleotides, which include a variety of ATP-gated ion channels (assembled from different subtypes of P2X-receptor subunit) and also different subtypes of G protein-coupled nucleotide receptors (P2Y receptors) supports a major physiological role for ATP in the regulation of hearing and balance. Almost invariably both P2X and P2Y receptor expression is apparent in the complex tissue structures associated with the inner-ear labyrinth. However P2X-receptor expression, commonly associated with fast neurotransmission, is apparent not only with the cochlear and vestibular primary afferent neurons, but also appears to mediate humoral signaling via ATP-gated ion channel localization to the endolymphatic surface of the cochlear sensory epithelium (organ of Corti). This is the site of the sound-transduction process and recent data, including both electrophysiological, imaging, and immunocytochemistry, has shown that the ATP-gated ion channels are colocalized here with the mechano-electrical transduction channels of the cochlear hair cells. In contrast to this direct action of extracellular ATP on the sound-transduction process, an indirect effect is apparent via P2Y-receptor expression, prevalent on the marginal cells of the stria vascularis, a tissue that generates the standing ionic and electrical gradients across the cochlear partition. The site of generation of these gradients, including the dark-cell epithelium of the vestibular labyrinth, may be under autocrine or paracrine regulation mediated by P2Y receptors sensitive to both purines (ATP) and pyrimidines such as UTP. There is also emerging evidence that the nucleoside adenosine, formed as a breakdown product of ATP by the action of ectonucleotidases and acting via P1 receptors, is also physiologically significant in the inner ear. P1-receptor expression (including A1, A2, and A3 subtypes) appear to have roles associated with stress, acting alongside P2Y receptors to enhance cochlear blood flow and to protect against the action of free radicals and to modulate the activity of membrane conductances. Given the positioning of a diverse range of purinergic-signaling pathways within the inner ear, elevations of nucleotides and nucleosides are clearly positioned to affect hearing and balance. Recent data clearly supports endogenous ATP- and adenosine-mediated changes in sensory transduction via a regulation of the electrochemical gradients in the cochlea, alterations in the active and passive mechanical properties of the cells of the sensory epithelium, effects on primary afferent neurons, and control of the blood supply. The field now awaits conclusive evidence linking a physiologically-induced modulation of extracellular nucleotide and nucleoside levels to altered inner ear function.