The dermal papilla is established as a permanent and stable population of specialized fibroblasts that first appear as a cellular aggregate that interacts with the epidermis to ensure follicle development. Our experimental findings strongly suggest that thereafter the papilla, in association with the confluent lower dermal sheath, continues to interact with the follicular epidermis with the papilla cells, which retain their aggregative property, undergoing cyclic changes in size and synthetic activities in phase with the hair cycle. In these activities, the lower follicle dermis appears to act as a functional unit that retains key embryonic characteristics throughout the lifetime of the follicle, re-enacting its inductive influence over follicular epidermis to regulate the profound morphogenetic changes that occur during successive hair cycles and to determine the physical characteristics of the fibers produced. While epidermal mitotic inhibitors have been suggested as a controlling mechanism in the hair cycle, we have argued that the papilla provides potent factors that stimulate epidermal proliferation in the hair germ to initiate, and then sustain, anagen and also follicle morphogenesis. Our recent findings with cocultures of dermal papilla and epidermal cells, which demonstrated that papilla cells enhance epidermal cell attachment and proliferative activity, reinforces this supposition. Thus, it may prove that the intrinsically determined aspect of the hair cycle reflects and is dependent on an intrapapillary cycle of events. Furthermore, we have suggested that at another level of interaction the dermal component of the follicle may mediate the influence of systemic factors, which are known to modify this innately programmed pattern of follicle behavior.(ABSTRACT TRUNCATED AT 250 WORDS)