Recent advances in epithelial stem cell biology have resulted in the isolation of hair follicle stem cells, which generate hair follicles when injected into immunodeficient mice. These isolated hair follicle epithelial stem cells must be combined with ‘inductive’ dermal cells to produce new hair follicles. The advent of techniques for cultivating inductive dermal cells and competent epithelial stem cells creates the opportunity to bioengineer hair follicles for the treatment of hair loss.