The LIM homeodomain transcription factor Lmx1a shows a dynamic expression in the developing mouse ear that stabilizes in the non-sensory epithelium. Previous work showed that Lmx1a functional null mutants have an additional sensory hair cell patch in the posterior wall of a cochlear duct and have a mix of vestibular and cochlear hair cells in the basal cochlear sensory epithelium. In E13.5 mutants, Sox2-expressing posterior canal crista is continuous with an ectopic “crista sensory epithelium” located in the outer spiral sulcus of the basal cochlear duct. The medial margin of cochlear crista is in contact with the adjacent Sox2-expressing basal cochlear sensory epithelium. By E17.5, this contact has been interrupted by the formation of an intervening non-sensory epithelium, and Atoh1 is expressed in the hair cells of both the cochlear crista and the basal cochlear sensory epithelium. Where cochlear crista was formerly associated with the basal cochlear sensory epithelium, the basal cochlear sensory epithelium lacks an outer hair cell band, and gaps are present in its associated Bmp4 expression. Further apically, where cochlear crista was never present, the cochlear sensory epithelium forms a poorly ordered but complete organ of Corti. We propose that the core prosensory posterior crista is enlarged in the mutant when the absence of Lmx1a expression allows JAG1-NOTCH signaling to propagate into the adjacent epithelium and down the posterior wall of the cochlear duct. We suggest that the cochlear crista propagates in the mutant outer spiral sulcus because it expresses Lmo4 in the absence of Lmx1a.