Lhx2 is expressed from an early time point during HF morphogenesis in basal keratinocytes before a dermal condensate (dc) is formed (Stage 0), and is broadly expressed in the epithelial part of the HF in the subsequent stages of morphogenesis. In a fully developed HF (Stage 8 of morphogenesis), Lhx2 is expressed by cells in the ORS and in the most proximal part of the hair bulb (hb). When the HF enters telogen Lhx2 expression becomes undetectable (Telogen, Early) but expression reappears in CD34− cells in the secondary hair germ (2°HG) immediately prior to anagen induction (Telogen, Late). The pattern of Lhx2 expression during morphogenesis is thereafter reiterated during anagen progression (Sub-stages I-VI) until the next anagen-catagen-telogen transition occurs and Lhx2 expression is turned off. The conditional inactivation of Lhx2 in postnatal HFs reveal that these HFs do not develop beyond Sub-stage III of the anagen phase showing that Lhx2 is required to develop further (blue arrow in anagen progression). The mouse strain homozygous for the hypomorphic allele of Lhx2 (Lhx2Neo/Neo), revealed that embryonic HFs are developmentally arrested at an early stage in this loss-of-function model. Since we rarely identified HFs at Stage 5 we suggest that Lhx2 is required to develop beyond Stage 4 (blue arrow in HF morphogenesis). HFs expressing transgenic Lhx2 (Lhx2-GFP) during postnatal HF cycling can enter catagen and telogen similar to control HFs, but transgenic Lhx2 expression causes premature initiation of anagen (purple arrows). The cells expressing transgenic Lhx2 preferentially locate to the proximal part of the hair bulb where the cells expressing endogenous Lhx2 are also located. Since transgenic expression of Lhx2 appears to induce endogenous Lhx2 expression, we suggest that numerous cells co-express the transgene and the endogenous gene, particularly in the proximal part of hb. Cells expressing transgenic Lhx2 are also located in the IRS whereas endogenous Lhx2 is not expressed in this area. 2°HG, secondary hair germ; bu, bulge region; ch, club hair; d, dermis; dc, dermal condensate; DP, dermal papilla; e, epidermis; hb, hair bulb; HS, hair shaft; IRS, inner root sheath; Me, melanocytes synthesising pigment; Mx, matrix; ORS, outer root sheath.