The ear is made up of three sections.
The outer ear includes the external ear (auricle or pinna) and the ear canal. The auricle helps to collect the sound waves and the ear canal then directs the sound waves to the ear drum.
The middle ear includes the ear drum, ear bones and a membrane that leads to the inner ear (oval window). There are 3 tiny ear bones (ossicles) in the middle ear – the malleus, the incus and the stapes. These ear bones are connected to the ear drum. They carry the vibrations from the ear drum to the cochlea.
The inner ear is made up of the cochlear and the semicircular canals (responsible for balance). The cochlea is filled with fluid and is lined with tiny hair cells. The sound vibrations cause the fluid to move and this stimulates the hair cells which then produce small electrical impulses. These electrical impulses travel to the brain via the auditory nerve. The brain processes these impulses as sound.
So in summary, sound travels in waves. These sound waves travel through the ear canal and hit the ear drum, causing it to vibrate. The ear bones carry the vibrations from the ear drum to the cochlea. The cochlear converts the vibrations to electrical impulses that travel to the brain via the auditory nerve.
A diagram of the ear produced by the California Ear Institute – www.calear.com (reproduced with permission) Click to enlarge.
For more information refer to the Australian Hearing Factsheet – How Do We Hear