Known DP signaling and potential DS signaling during the hair cycle. During the growth phase (anagen), the DP signals to epithelial progenitors to instruct their proliferation and upward differentiation. During the regression phase (catagen), dermal sheath contraction at the interface of the club hair and epithelial strand (the “bottleneck”) powers follicle regression and upward movement of the DP. DS contraction facilitates the relocation of the DP to its stem cell-adjacent position by the resting phase (telogen). During follicle regeneration at the onset of the next growth phase, the DP provides activating signals to the SCs to trigger their proliferation. Currently, there are no known roles for the DS as a signaling niche during the hair cycle although many intriguing possibilities exist, including to regulate: progenitor proliferation during follicle growth, progenitor apoptosis and basement membrane remodeling during follicle regression, and SC quiescence/activation during follicle rest either through direct paracrine signaling or indirectly by relaying molecular signals through the DP. It is also possible that the DS – located at the interface of the extrafollicular environment – might engage in molecular crosstalk with various cell types in the dermis including fibroblasts, immune cells, adipocytes, and vasculature. DS = dermal sheath; DP = dermal papilla; Mx = matrix; ORS = outer root sheath progenitors; BM = basement membrane.