In vitro models of human hair follicle-like tissue could be fundamental tools to better understand hair follicle morphogenesis and hair drug screening. During prenatal development and postnatal cyclic hair regeneration, hair follicle morphogenesis is triggered by reciprocal interactions and the organization of the epithelial and mesenchymal cell populations. Given this mechanism, we developed an approach to induce hair peg-like sprouting in organoid cultures composed of epithelial and mesenchymal cells. Human fetal/adult epithelial and mesenchymal cells were cultured in a medium supplemented with a low concentration of either Matrigel or collagen I. These extracellular matrices significantly enhanced the self-organization capabilities of the epithelial and mesenchymal cells, resulting in spherical aggregation and subsequent hair peg-like sprouting. The length of the hair peg sprouting and associated gene expression significantly increased in the presence of a well-known hair drug, minoxidil. This approach may be beneficial for testing hair growth-promoting drug candidates.