Loss of sensory hair cells is the leading cause of deafness in humans. The mammalian cochlea cannot regenerate its complement of sensory hair cells. Thus at present, the only treatment for deafness due to sensory hair cell loss is the use of prosthetics, such as hearing aids and cochlear implants. In contrast, in nonmammalian vertebrates, such as birds, hair cell regeneration occurs following the death of hair cells and leads to the restoration of hearing. Regeneration in birds is successful because supporting cells that surround the hair cells can divide and are able to subsequently differentiate into new hair cells. However, supporting cells in mammals do not normally divide or transdifferentiate when hair cells are lost, and so regeneration does not occur. To understand the failure of mammalian cochlear hair cell regeneration, we need to understand the molecular mechanisms that underlie cell division control and hair cell differentiation, both during embryogenesis and in the postnatal mouse. In this review, we present a discussion of the regulation of cell proliferation in embryogenesis and during postnatal maturation. We also discuss the role of the Cip/Kip cell cycle inhibitors and Notch signaling in the control of stability of the differentiated state of early postnatal supporting cells. Finally, recent data indicate that some early postnatal mammalian supporting cells retain a latent capacity to divide and transdifferentiate into sensory hair cells. Together, these observations make supporting cells important therapeutic targets for continued efforts to induce hair cell regeneration.