Trichohyalin (THH) is a major structural protein of the inner root sheath cells and medulla layer of the hair follicle and, to a lesser extent, of other specialized epithelia. THH is a high molecular weight insoluble alpha-helix-rich protein that forms rigid structures as a result of postsynthetic modifications by two Ca2+-dependent enzymes, transglutaminases (TGases) (protein cross-linking) and peptidyl-arginine deiminase (conversion of arginines to citrullines with loss of organized structure). The modified THH is thought to serve as a keratin intermediate filament matrix protein and/or as a constituent of the cell envelope. In this paper, we have explored in vitro the order of processing of THH to fulfill these functions, using an expressed truncated, more soluble form THH-8. THH-8 is a complete substrate for three known TGases expressed in epithelia, but the kinetic efficiency with TGase 3 is by far the greatest. Following maximal conversion of its arginines to citrullines, THH-8 is cross-linked even more efficiently by TGase 3, using most glutamines partially and all lysines. In addition, we show that insoluble aggregates of THH-8 or native pig tongue THH can be solubilized following peptidyl-arginine deiminase modification. Together, these data suggest an in vivo model in which THH located in insoluble cytoplasmic droplets is first modified by peptidyl-arginine deiminase which denatures it and makes it more soluble. This renders it available for efficient cross-linking by TGase 3 to form highly cross-linked rigid structures in the cells. This temporal order of reaction is supported by the observation that THH is expressed in hair follicle cells before the TGase 3 enzyme.