The mechanosensitive hair cells of the vertebrate acousticolateralis system have an apical bundle of stereocilia, deflections of which control the opening of mechano-electrical transduction channels and thus generate receptor potentials in the cell below. This review describes current theories of hair cell function in the light of recent immunocytochemical and ultrastructural findings; in particular, the location and operation of the transduction channels are considered. The most widely accepted hypothesis of mechanotransduction by hair cells is that fine extracellular links that run between the tips of shorter stereocilia and the sides of taller ones operate the transduction channels. However, the fact that the transduction channels are amiloride sensitive has led to labeling experiments using antibodies to the amiloride-sensitive epithelial Na+ channel from kidney which suggest that the mechanotransduction channels may not be directly associated with the tip links. Instead, they appear to be located near a junctionlike structure at the point of contact between the shorter and taller stereocilia. The implications of these findings for the tip link hypothesis are discussed.