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Hair follicle regeneration involves epithelial–mesenchymal interactions (EMIs) of follicular epithelial and dermal papilla (DP) cells. Co-grafting of those cellular components from mice allows complete hair reconstitution. However, regeneration of human hair in a similar manner has not been reported. Here, we investigated the possibility of cell-based hair generation from human cells. We found that DP-enriched cells (DPE) are more critical than epidermal cells in murine hair reconstitution on a cell number basis, and that murine DPE are also competent for hair regeneration with rat epidermal cells. Co-grafting of human keratinocytes derived from neonatal foreskins with murine DPE produced hair follicle-like structures consisting of multiple epidermal cell layers with a well-keratinized innermost region. Those structures expressed hair follicle-specific markers including hair keratin, and markers expressed during developmental stages. However, the lack of regular hair structures indicates abnormal folliculogenesis. Similar hair follicle-like structures were also generated with cultured human keratinocytes after the first passage, or with keratinocytes derived from adult foreskins, demonstrating that epidermal cells even at a mature stage can differentiate in response to inductive signals from DP cells. This study emphasizes the importance of EMI in follicular generation and the differentiation potential of epidermal keratinocytes.Journal of Investigative Dermatology (2007) 127, 2106–2115; doi:10.1038/sj.jid.5700823; published online 12 April 2007 [ABSTRACT FROM AUTHOR]