We have studied the function of the zinc finger transcription factor gata3 in auditory system development by analysing temporal profiles of gene expression during differentiation of conditionally immortal cell lines derived to model specific auditory cell types and developmental stages. We tested and applied a novel probabilistic method called the gamma Model for Oligonucleotide Signals to analyse hybridization signals from Affymetrix oligonucleotide arrays. Expression levels estimated by this method correlated closely (p<0.0001) across a 10-fold range with those measured by quantitative RT-PCR for a sample of 61 different genes. In an unbiased list of 26 genes whose temporal profiles clustered most closely with that of gata3 in all cell lines, 10 were linked to Insulin-like Growth Factor signalling, including the serine/threonine kinase Akt/PKB. Knock-down of gata3 in vitro was associated with a decrease in expression of genes linked to IGF-signalling, including IGF1, IGF2 and several IGF-binding proteins. It also led to a small decrease in protein levels of the serine-threonine kinase Akt2/PKBβ, a dramatic increase in Akt1/PKBα protein and relocation of Akt1/PKBα from the nucleus to the cytoplasm. The cyclin-dependent kinase inhibitor p27^kip1, a known target of PKB/Akt, simultaneously decreased. In heterozygous gata3 null mice the expression of gata3 correlated with high levels of activated Akt/PKB. This functional relationship could explain the diverse function of gata3 during development, the hearing loss associated with gata3 heterozygous null mice and the broader symptoms of human patients with Hearing-Deafness-Renal anomaly syndrome.