Our previous studies revealed a critical role of the lysosomal membrane protein LIMP2 in the regulation of membrane transport processes in the endocytic pathway. Here we show that LIMP2-deficient mice display a progressive high-frequency hearing loss and decreased otoacoustic emissions as early as 4 weeks of age. In temporal overlap to hearing impairment, fluorescence immunohistochemical studies revealed that the potassium channel KCNQ1 and its beta-subunit KCNE1 were almost completely lost in the luminal part of marginal cells in the stria vascularis, affecting first higher and later also lower frequency processing cochlear turns. Concomitant with this, the expression of megalin, a multiligand endocytic receptor, was reduced in luminal surfaces of marginal cells within the stria vascularis. KCNQ1/KCNE1 and megalin were also lost in the dark cells of the vestibular system. Although LIMP2 is normally expressed in all cells of the stria vascularis, in the organ of Corti and cochlear neurons, the lack of LIMP2 preferentially caused a loss of KCNQ1/KCNE1 and megalin, and structural changes were only seen months later, indicating that these proteins are highly sensitive to disturbances in the lysosomal pathway. The spatio-temporal correlation of the loss of KCNQ1/KCNE1 surface expression and loss of hearing thresholds supports the notion that the decline of functional KCNQ1/KCNE1 is likely to be the primary cause of the hearing loss. Our findings suggest an important role for LIMP2 in the control of the localization and the level of apically expressed membrane proteins such as KCNQ1, KCNE1 and megalin in the stria vascularis.