Pendred syndrome, characterized by childhood deafness and postpuberty goiter, is caused by mutations of SLC26A4, which codes for the anion exchanger pendrin. The goal of the present study was to determine how loss of pendrin leads to hair cell degeneration and deafness. We evaluated pendrin function by ratiometric microfluorometry, hearing by auditory brain stem recordings, and expression of K⁺ and Ca²⁺ channels by confocal immunohistochemistry. Cochlear pH and Ca²⁺ concentrations and endocochlear potential (EP) were measured with double-barreled ion-selective microelectrodes. Pendrin in the cochlea was characterized as a formate-permeable and DIDS-sensitive anion exchanger that is likely to mediate HCO₃⁻ secretion into endolymph. Hence endolymph in Slc26a4^+/− mice was more alkaline than perilymph, and the loss of pendrin in Slc26a4^−/− mice led to an acidification of endolymph. The stria vascularis of Slc26a4^−/− mice expressed the K⁺ channel Kcnj10 and generated a small endocochlear potential before the normal onset of hearing at postnatal day 12. This small potential and the expression of Kcnj10 were lost during further development, and Slc26a4^−/− mice did not acquire hearing. Endolymphatic acidification may be responsible for inhibition of Ca²⁺ reabsorption from endolymph via the acid-sensitive epithelial Ca²⁺ channels Trpv5 and Trpv6. Hence the endolymphatic Ca²⁺ concentration was found elevated in Slc26a4^−/− mice. This elevation may inhibit sensory transduction necessary for hearing and promote the degeneration of the sensory hair cells. Degeneration of the hair cells closes a window of opportunity to restore the normal development of hearing in Slc26a4^−/− mice and possibly human patients suffering from Pendred syndrome.