Otitis media with effusion (OME) is the most common cause of hearing loss in children and tympanostomy to alleviate the condition remains the commonest surgical intervention in children in the developed world. Chronic and recurrent forms of OM are known to have a very significant genetic component, however, until recently little was known of the underlying genes involved. The identification of mouse models of chronic OM has indicated a role of transforming growth factor beta (TGFβ) signalling and its impact on responses to hypoxia in the inflamed middle ear. We have, therefore, investigated the role of TGFβ signalling and identified and characterized a new model of chronic OM carrying a mutation in the gene for transforming growth interacting factor 1 (Tgif1). Tgif1 homozygous mutant mice have significantly raised auditory thresholds due to a conductive deafness arising from a chronic effusion starting at around 3 weeks of age. The OM is accompanied by a significant thickening of the middle ear mucosa lining, expansion of mucin-secreting goblet cell populations and raised levels of vascular endothelial growth factor, TNF-α and IL-1β in ear fluids. We also identified downstream effects on TGFβ signalling in middle ear epithelia at the time of development of chronic OM. Both phosphorylated SMAD2 and p21 levels were lowered in the homozygous mutant, demonstrating a suppression of the TGFβ pathway. The identification and characterization of the Tgif mutant supports the role of TGFβ signalling in the development of chronic OM and provides an important candidate gene for genetic studies in the human population.