Hair follicles (HFs) are renewed via multipotent stem cells located in a reservoir (the bulge); however, little is known about how they generate multi-tissue HFs from a proliferative zone (the matrix). To address this issue, we temporally induced clonal labeling during HF growth. Challenging the prevailing hypothesis, we found that the matrix contains restricted self-renewing stem cells for each inner structure. These cells are located around the dermal papilla forming a germinative layer. They occupy different proximodistal sectors and produce differentiated cells along the matrix radial axis via stereotyped lineages and cell behavior. By contrast, the outer layer of HFs displays a mode of growth involving apoptosis that coordinates the development of outer and inner structures. HF morphology is therefore determined by the organization of cell fates along the proximodistal axis and by cell behavior along the radial (lateral) axis in the matrix. Thus, our studies suggest that fate and behavior are organized by two systems (uncoupled), and this uncoupling may represent a fundamental way to simplify morphogenesis.