Hair-bearing, transitional, and alopecic scalp from three males and one female with progressive pattern alopecia were examined. Ultrastructural studies disclosed measurable thickening of the follicular adventitial sheaths of transitional and alopecic zones compared with those in the non-alopecic zones. This finding was associated with mast cell degranulation and fibroblast activation within the fibrous sheaths. Immunohistochemically, control biopsies were devoid of follicular inflammation (n = 3), while transitional regions consistently showed the presence of activated T-cell infiltrates about the lower portions of follicular infundibula. These infiltrates were associated with the induction of class II antigens on the endothelial linings of venules within follicular adventitia and with apparent hyperplasia of follicular dendritic cells displaying the CD1 epitope. Inflammatory cells infiltrated the region of the follicular bulge, the putative source of stem cells in cycling follicles. The data suggest that progressive fibrosis of the perifollicular sheath occurs in lesions of pattern alopecia, and may begin with T-cell infiltration of follicular stem cell epithelium. Injury to follicular stem cell epithelium and/or thickening of adventitial sheaths may impair normal pilar cycling and result in hair loss.