A case is reported in whom there was a unilateral complete arrest of differentiation of the otocyst associated with an ipsilateral mild hemifacial hypoplasia and auricular abnormalities. The patient's tympanic membrane and VII nerve function were normal and a normal ossicular mass was identified on CT Scan. This case illustrates that development of the middle ear cavity (exclusive of structures on the medial wall), external ear canal and VII nerve can be independent of development of the inner ear and that a unilateral absence of otic capsule differentiation can take place without severe associated abnormalities.