In men who are genetically predisposed to develop androgenetic alopecia (AGA; male pattern hair loss), endogenous androgens alter scalp hair follicles, resulting in production of vellus-like, miniaturised hair, rather than cosmetically significant terminal hair. This change leads to a progressive decline in visible scalp hair density, readily perceived by the patient as thinning and, eventually, baldness. Dihydrotestosterone (DHT), a metabolite of testosterone produced by the enzyme 5alpha-reductase, has been implicated as the specific androgen in the pathogenesis of AGA. Men genetically deficient in the Type 2 isoenzyme of 5alpha-reductase do not develop AGA. Moreover, Type 2 5alpha-reductase has been detected in scalp hair follicles, and balding scalps contain increased Type 2 5alpha-reductase activity and DHT levels. Taken together, these findings provide a rationale for the use of Type 2 5alpha-reductase inhibitors in the treatment of men with AGA. Finasteride, a specific and potent inhibitor of human Type 2 5alpha-reductase, decreases the formation of DHT from testosterone. Originally developed for the treatment of men with benign prostatic hyperplasia (BPH) as a 5 mg tablet, finasteride was subsequently evaluated as a treatment for AGA. Clinical studies in balding men demonstrated that finasteride reduced scalp DHT levels and improved hair growth, confirming the role of DHT in the pathophysiology of AGA. Dose-ranging studies established the optimal dose of 1 mg/day for the treatment of men with this disorder. Large, multicentre studies established the safety and efficacy of finasteride 1 mg, leading to marketing of Propecia (finasteride 1 mg) as a new treatment for men with AGA.