Genetic factors contributing to hearing loss (HL) are heterogeneous, and effective medical treatments remain limited. We identified 3 distinct missense variants in CPD, encoding carboxypeptidase D, in 5 individuals with congenital deafness from 3 unrelated families, affecting the catalytically active CP domain 2 of this protein. Subsequent analysis of a larger cohort from the 100,000 Genomes Project revealed an enrichment of rare protein-altering CPD variants in individuals with HL. We show that CPD localizes to sensory epithelium and nerve cells in the mouse cochlea, and the enzymatic activity of CPD, crucial for nitric oxide (NO) production through arginine processing, is impaired in affected individuals. The levels of arginine, NO, and cGMP in patient-derived fibroblasts are also decreased, leading to endoplasmic reticulum stress–mediated responses being triggered in the cells. Silencing of Cpd in organotypic mouse cochlea cultures leads to increased apoptosis. Finally, Drosophila models of CPD deficiency display defective Johnston's organ, impaired auditory transduction, and sensory and movement abnormalities. Notably, these phenotypes are partially rescued by supplementation with arginine or sildenafil, a cGMP enhancer. Our findings establish CPD mutations as a cause of congenital HL, highlighting that the NO signaling pathway offers a promising therapeutic avenue.