The prevalence of hearing loss after damage to the mammalian cochlea has been thought to be due to a lack of spontaneous regeneration of hair cells, the primary receptor cells for sound. Here, we show that supporting cells, which surround hair cells in the normal cochlear epithelium, differentiate into new hair cells in the neonatal mouse following ototoxic damage. Using lineage tracing, we show that new hair cells, predominantly outer hair cells, arise from Lgr5-expressing inner pillar and third Deiters cells and that new hair cell generation is increased by pharmacological inhibition of Notch. These data suggest that the neonatal mammalian cochlea has some capacity for hair cell regeneration following damage alone and that Lgr5-positive cells act as hair cell progenitors in the cochlea.