We attempted establishing an in vitro coculture system by using human dermal papilla cells (DPCs) from androgenetic alopecia (AGA) and keratinocytes (KCs) to explore the role of androgens in hair growth regulation. Androgen showed no significant effect on the growth of KCs when they were cocultured with DPCs from AGA. Because the expressions of mRNA of androgen receptor (AR) decreased during subcultivation of DPCs in vitro, we transiently transfected the AR expression vector into the DPCs and cocultured them with KCs. In this modified coculture, androgen significantly suppressed the growth of KCs by approximately 50%, indicating that overexpression of AR can restore the responsiveness of the DPCs to androgen in vivo. We found that androgen stimulated the expression of TGF-beta1 mRNA in the cocultured DPCs. ELISA assays demonstrated that androgen treatment increased the secretion of both total and active TGF-beta1 in the conditioned medium. Moreover, the neutralizing anti-TGF-beta1 antibody reversed the androgen-elicited growth inhibition of KCs in a dose-dependent manner. These findings suggest that androgen-inducible TGF-beta1 derived from DPCs of AGA is involved in epithelial cell growth suppression in our coculture system, providing the clue to understand the paradoxical effects of androgens for human hair growth.