Intrinsic dermal-epidermal interactions are central to the development and growth of hair. This article describes investigations into the inductive properties of specific dermal and epidermal cell populations from adult follicles by means of cell culture and in vivo implantation. It highlights the inductive powers of cultured dermal papilla cells and the more recent finding that the germinative epidermal cells of the lower follicle also can stimulate hair growth. How the reconstruction of a hair follicle from its constituent parts has been achieved is described. The significance of these findings is considered with reference to human hair growth, tissue engineering, and the prospects for elucidating the molecular signalling mechanisms that underpin dermal-epidermal interplay.