2-hydroxypropyl-β-cyclodextrin (HPβCD), a cholesterol chelator used to treat Niemann-Pick C1 (NPC1) lysosomal storage disease, causes hearing loss in mammals by preferentially destroying outer hair cells. Because cholesterol plays an important role in early neural development, we hypothesized that HPβCD would cause more extensive damage to postnatal cochlear and vestibular structures in than adult rats. This hypothesis was tested by administering HPβCD to adult rats and postnatal day 3 (P3) cochlear and vestibular organ cultures. Adult rats treated with HPβCD developed hearing impairment and outer hair cell loss 3-day post-treatment; damage increased with dose from the high frequency base toward the low-frequency apex. The HPβCD-induced histopathologies were more severe and widespread in cochlear and vestibular cultures at P3 than in adults. HPβCD destroyed both outer and inner hair cells, auditory nerve fibers and spiral ganglion neurons as well as type I and type II vestibular hair cells and vestibular ganglion neurons. The early stage of HPβCD damage involved disruption of hair cell mechanotransduction and destruction of stereocilia. HPβCD-mediated apoptosis in P3 cultures was most-strongly initiated by activation of the extrinsic caspase-8 cell death pathway in cochlear and vestibular hair cells and neurons followed by activation of executioner caspase-3. Thus, HPβCD is toxic to all types of postnatal cochlear and vestibular hair cells and neurons in vitro whereas in vivo it only appears to destroy outer hair cells in adult cochleae. The more severe HPβCD-induced damage in postnatal cultures could be due to greater drug bioavailability in vitro and/or greater vulnerability of the developing inner ear.