Mutations in the chromatin remodeling enzyme CHD7 cause CHARGE syndrome, which affects multiple organs including the inner ear. We investigated how CHD7 mutations affect otic development in human inner ear organoids. We found loss of CHD7 or its chromatin remodeling activity leads to complete absence of hair cells and supporting cells, which can be explained by dysregulation of key otic development-associated genes in mutant otic progenitors. Further analysis of the mutant otic progenitors suggested that CHD7 can regulate otic genes through a chromatin remodeling-independent mechanism. Results from transcriptome profiling of hair cells revealed disruption of deafness gene expression as a potential underlying mechanism of CHARGE-associated sensorineural hearing loss. Notably, co-differentiating CHD7 knockout and wild-type cells in chimeric organoids partially rescued mutant phenotypes by restoring otherwise severely dysregulated otic genes. Taken together, our results suggest that CHD7 plays a critical role in regulating human otic lineage differentiation and deafness gene expression.