A vestibular schwannoma (VS), also called acoustic neuroma, is a benign tumor that develops on the vestibulocochlear nerve that passes from the inner ear to the brain. The tumor originates when Schwann cells that form the insulating myelin sheath on the nerve malfunction. Normally, Schwann cells function beneficially to protect the nerves which transmit balance and sound information to the brain. However, sometimes a mutation in the tumor suppressor gene, NF2, located on chromosome 22, results in abnormal production of the cell protein named Merlin, and Schwann cells multiply to form a tumor. The tumor originates mostly on the vestibular division of the nerve rather than the cochlear division, but hearing as well as balance will be affected as the tumor enlarges. The great majority of these VSs (95%) are unilateral, in one ear only. They are called "sporadic" (i.e., by-chance, non-hereditary). Although non-cancerous, they can do harm or even become life-threatening if they grow to press on other cranial nerves and vital structures such as the brainstem. Variations in the mutation determine the nature of the tumor's development. The only environmental exposure that has been definitely associated with the growth of a VS is therapeutic radiation exposure to the head.

Reference
Wiki: Vestibular schwannomas